Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH TRANSPORT COMMISSION BILL (By Order)

Second Reading deferred till Tuesday next.

GREAT OUSE WATER BILL (By Order)

Read a Second time and referred to the Examiners of Petitions for Private Bills.

MANCHESTER CORPORATION BILL (By Order)

Second Reading deferred till Tuesday next.

MIDDLESEX COUNTY COUNCIL BILL (By Order)

Read a Second time and committed.

TRUNK PIPELINES BILL (By Order)

Second Reading deferred till Tuesday, 7th March.

ZETLAND COUNTY COUNCIL (SYMBISTER HARBOUR) ORDER CONFIRMATION BILL

Read the Third time and passed.

Oral Answers to Questions — HONG KONG

Wages and Hours of Work

Mr. Frank Allaun: asked the Secretary of State for the Colonies if he will state the average wages and working hours in Hong Kong in all industries, and in the manufacturing of small electrical goods; and what steps he will take to improve them.

The Under-Secretary of State for the Colonies (Mr. Hugh Fraser): These wages statistics are not available. The average daily hours of work of women in industry are between 9½ and 9½; for men they are estimated to be 10. In the electrical goods industry, hours of work are just under 10 for both men and women.
Wages are determined mainly by collective bargaining. The present regulations governing working hours for women and young persons are a first step in raising minimum standards of employment. The Governor has further proposals under consideration.

Mr. Allaun: I thank the Miinster for that reply. Is he aware that, thanks to sweated labour, such goods as electrical lampholders are being sold here at 7s. 6d. a dozen, including sea transport, whereas the cheapest possible price for Lancashire manufacturers is 12s. 6d. a dozen? Since the Government, following prompting by the Opposition, were able to reduce working hours in Hong Kong cotton mills, cannot they reduce them considerably in other industries as well?

Mr. Fraser: We are looking at this, but I must point out to the hon. Gentleman that, as far as we can estimate, wages rose by over 15 per cent. last year in Hong Kong.

Mr. H. Hynd: asked the Secretary of State for the Colonies, in view of the provisions of the Factories and Industrial Undertakings Ordinance, 1955, how many workers in Hong Kong are employed seven days a week.

Mr. H. Fraser: No figures are available. Regulations under the Ordinance require industrial employers to grant a weekly day of rest to women and young persons.

Mr. Hynd: Will the Minister look into the case which I have referred to him in correspondence? When I recently visited the textile mill in question not only was it admitted that seven days a week were being worked but it was insisted that this was necessary. It was said that the workers preferred to work a seven-day week, and volunteered to work on Sundays. In view of the number of refugees in Hong Kong, is the hon. Member aware of the kind of volunteering that could take place in such circumstances?

Mr. Fraser: I have had an inquiry made into the mill to which the hon. Member refers. Although the factory works seven days a week, that does not apply to the women and children concerned.

Mr. Rankin: But is it not the case that the Kowloon riots of 1956 were largely promoted by the terrible industrial conditions in Hong Kong? Is not the hon. Gentleman further aware that we were then promised that these matters would be looked into? Does it not seem that nothing much has been done?

Mr. Fraser: I entirely disagree with the hon. Member. A great deal has been done, including the Ordinance to which he is referring, which was brought in in 1959, restricting female and child employment.

Electricity Supply

Mr. Thornton: asked the Secretary of State for the Colonies if he will make available in the Library of the House of Commons a copy of the proposals of the Hong Kong electricity supply companies which have been submitted to the Governor of Hong Kong as an alternative to the nationalisation of the electricity undertakings recommended by the Hong Kong Electricity Supply Companies Commission in its report dated 17th December, 1959.

Mr. H. Fraser: Yes, Sir. I have also had placed in the Library a copy of the Press release announcing the Hong Kong Government's rejection of the proposals.

Oral Answers to Questions — COLONIAL TERRITORIES

East Africa—Seychelles (Transport)

Mr. P. Williams: asked the Secretary of State for the Colonies what progress has been made in providing improved facilities for travel between East Africa and the Seychelles.

Mr. H. Fraser: With effect from 1959 the British India Steam Navigation Company Ltd. increased the number of its calls at Seychelles on its services between Mombasa and India by six in each direction each year.
I regret to say that negotiations for the introduction of a flying-boat service have proved unfruitful. Nevertheless, other solutions are under consideration.

Mr. Williams: Can my hon. Friend give any encouragement to the House in this matter, because the ability of this Colony to raise its own standard of living depends to a large degree on the tourist trade? If anything can be done to provide improved facilities for tourism, it will be worth while not only in removing some of the financial burdens from this country but in enabling the Colony to pull itself up to a certain extent.

Mr. Fraser: I have this point very much in mind.

Africans (Secondary Education)

Mr. Swingler: asked the Secretary of State for the Colonies what percentage of African children at present receive secondary education, and how many new secondary schools are currently under construction, in each Colonial Territory in Africa.

The Secretary of State for the Colonies (Mr. Iain Macleod): With permission, as the Answer is long, I will circulate it with the OFFICIAL REPORT.

Mr. Swingler: I thank the Minister for the information that he is to provide. Can he say whether the figures answering the first part of the Question show a situation that is any better than the revelation of his hon. Friend last week, that only 1 per cent. of African children in Northern Rhodesia, for example, at present receive secondary education?

Mr. Macleod: I think it is difficult. The figures were given on 14th November to the hon. Member for Eton


and Slough (Mr. Brockway) and they are contained in HANSARD. I am afraid that the hon. Gentleman will have to study the Answer to draw any sort of general conclusion
Following is the Answer:
As regards the first part of the Question I would refer the hon. Member to the estimates which I gave in a Written Answer on the 14th November last to the hon. Member for Eton and Slouth (Mr. Brockway). The figures for secondary education in Northern Rhodesia and Nyasaland should read 1·0 per cent. and 0·6 per cent. respectively.
As regards the second part of the Question the numbers of secondary schools under construction are as follows:

KENYA: 17 new schools which, together with additions to 4 existing schools, will provide 1,360 additional places.
UGANDA: 1 new school which, with 9 existing schools being completed or expanded, will provide 300 additional places.
TANGANYIKA: 13 new schools which, together with additions to 16 existing schools, will provide 1,077 additional places.
ZANZIBAR: None.
SIERRA LEONE: 10 new schools which, together with additions to 10 existing schools, will provide 2,800 additional places.
GAMBIA: 1 new school which will provide 163 new places, in addition to accommodating the 273 pupils at present housed in temporary buildings to be replaced by the new school.
NORTHERN RHODESIA: 19 schools being built or extended, which will provide 2,010 additional places.
NYASALAND: 1 new school which, together with additions to 5 existing schools, will provide 300 additional places.

Note: The figures above relate to schools providing a secondary course beginning after 8 years of primary education and leading at the end of the fourth year of the course, to an examination which is either a General Certificate of Education at Ordinary Level or one of similar standard.

Prisoners (Transfer of Custody)

Mr. de Freitas: asked the Secretary of State for the Colonies under what conditions persons held in prisons in the Colonies are transferred to the custody of Governments of foreign countries.

Mr. H. Fraser: Persons held in prisons in the Colonies can be transferred to the custody of Governments of foreign countries only under extradition arrangements or under the Colonial Prisoners Removal Act, 1869, or the Colonial Prisoners Removal Act, 1884. The Colonial Prisoners Removal Acts extend to a foreign country only where Her

Majesty has the necessary jurisdiction in that country and has extended the Act in question to that country by Order in Council made in exercise of that jurisdiction.

Mr. de Freitas: Does the Under-Secretary realise that our law of extradition and our practice of extradition have developed over many years for the protection of political prisoners? Can he assure us that there will be no departure either from the law or practice which has so developed, merely because in the case of St. Helena the Foreign Office got itself into such an appalling mess?

Mr. Fraser: I have stated how the law stands in regard to the Colonial Prisoners Removal Act, 1869, and the Colonial Prisoners Removal Act, 1884. It is a question of law and a question on which I cannot move, but the Lord Privy Seal has promised to keep the House informed on the question of the Bahraini prisoners, and I am certain he will do so.

Colonial Development Corporation Investments

Mr. Tilney: asked the Secretary of State for the Colonies whether it is Her Majesty's Government's policy to invest public money through the Colonial Development Corporation in Territories that decide to leave the Commonwealth.

Mr. Iain Macleod: Under the terms of its statute, the Colonial Development Corporation may not invest in new projects in Territories which have become independent; but, whether or not a Territory which has become independent remains within the Commonwealth, the Colonial Development Corporation may complete investments approved before independence.

Mr. Tilney: However much we may wish to help all under-developed countries, is not this new policy surprising? For instance, was there an escape clause in the agreement with,the Cameroon Development Corporation, as it must have been known that a vote would be taken? Is it not rather surprising that we should help what may be a foreign country and deny the C.D.C. operations in a Commonwealth Territory?

Mr. Macleod: This is a difficult problem, but the C.D.C. has to operate commercially and it would certainly face very heavy losses indeed if it had to withdraw from projects owing to political change in a Territory. I should like notice of the question whether there was a clause in the agreement.

Oral Answers to Questions — NORTHERN RHODESIA

Industrial and Technical Education

Mr. Swingler: asked the Secretary of State for the Colonies if he has now considered the Report of the Committee under Sir David Lindsay Keir on industrial and technical education for Africans in Northern Rhodesia; what recommendations have been made; and what action he will take.

Mr. Iain Macleod: This Report has been completed, but not yet published. The Copperbelt Technical Foundation, the Northern Rhodesia Government and the Federal Government who were the joint sponsors of the inquiry, are now considering what joint action should be taken concerning publication and the Report's recommendations.

Mr. Swingler: Will not the right hon. Gentleman agree that it really is urgent to expedite these matters? Is it not a fact that the plans for trying to spread education for Africans are at the present moment extremely limited, and that the foundation, considering the inadequacy of secondary education, is a very small one? Will he do something to urge on and speed up consideration of these plans, and especially their implementation?

Mr. Macleod: I agree with what the hon. Gentleman has said. The Keir Report recommends a considerable expansion of facilities for technical education, and I hope that joint action on it will shortly be agreed.

Constitutional Conference

Mr. Speaker: Mr. Biggs-Davison—Question No. 9.

Mr. Bowles: On a point of order. Before that Question is dealt with, Mr. Speaker—I have already raised the question of hon. Members going to the Federation of Central Africa, and if hon. Members who have been there at the

expense of Sir Roy Welensky are asking Questions, is it not in order for them to disclose that fact?

Mr. Speaker: That is not a point of order for the Chair. It is the responsibility of the hon. Member concerned.

Mr. H. Hynd: Will my hon. Friend take it from me that I went to Hong Kong at my own expense?

Mr. Biggs-Davison: asked the Secretary of State for the Colonies whether he will make a statement about the Northern Rhodesia constitutional conference.

Mr. Brockway: asked the Secretary of State for the Colonies if he will make a statement on the composition and proceedings of the meetings in London on constitutional changes in Northern Rhodesia.

Mr. Stonehouse: asked the Secretary of State for the Colonies if he will make a statement about the progress of the talks on the Constitution for Northern Rhodesia.

Mr. Iain Macleod: The resumed Northern Rhodesia Conference began at Lancaster House on 30th January. The delegates of the United Federal Party and the Dominion Party have not so far attended. Two plenary meetings have been held, and in addition there have been continuous informal discussions with the Chiefs, the political parties and individual members.
Today the Conference has been discussing the questions of a House of Chiefs in plenary session.

Mr. Biggs-Davison: Is my right hon. Friend aware that there is grave disquiet about this conference, which is proceeding in the absence of the leading party of Northern Rhodesia? Is he further aware of the growing mistrust of the Government's intentions, and will he give an assurance that no constitution will be imposed on Northern Rhodesia over the heads of those who stand for federation and partnership and against racialism and the break-up of the Federation?

Mr. Macleod: As to the last part of that supplementary question, the obligation of Her Majesty's Government is quite clear, and we have carried it out not only at this conference but, as far as I know, at every conference It is


laid down in the 1953 White Paper. It is to consult, and naturally to consider representations that might be made by, the Federal Government. But that does not take away the final responsibility of Her Majesty's Government for decisions on these matters. As for the first part of the supplementary question, there have been many conferences which people have left, but it would be wholly wrong to stop a conference as important as this because the people of one party did not attend.

Mr. Brockway: Does the right hon. Gentleman agree that the representatives of the African parties and the Liberal Party have shown great patience in these proceedings When the U.F.P. and the Dominion Party have stayed away? Is he aware that, as distinct from the point of view put from the benches behind him, not only the overwhelming majority of the people of Northern Rhodesia but the overwhelming majority of Members of this House and of the people of this country will support him in seeking to establish democracy in Northern Rhodesia?

Mr. Macleod: With respect, the problem is a good deal more complicated than that. My hon. Friend pointed out that it was unsatisfactory to have a conference in the absence of one of the leading parties. This is true, but it nevertheless seems right to go on with the conference, just as I would have done if, shall we say, one of the African parties had not attended. It would be far more satisfactory from everybody's point of view, and particularly from the point of view of Northern Rhodesia, if every seat round the conference table were filled.

Mr. Stonehouse: Is the Minister aware that there is some lack of frankness about this? Will he say frankly to what extent the Federal Prime Minister can influence the progress of these talks? Will he assure the House that he will not be dissuaded from establishing genuine representative institutions which will have the support of the overwhelming mass of the population? Finally, will he undertake that at an early opportunity he will advise the other delegations to the Northern Rhodesia talks of the contents of the secret negotiations which took place last weekend?

Mr. Macleod: I have no knowledge of any secret negotiations which took place last weekend, and so I should find great difficulty in informing the conference of their nature. The situation is absolutely clear, and I have made it quite clear before. In conferences of this sort there is an obligation which we have always carried out to the full to keep the Federal Government fully informed, to consult with them, and I say that, naturally, implicit in consultation is that we should take full account of their representations. That has been and is the present position.

Mr. Turton: In order to avoid misunderstanding, will my right hon. Friend make it quite clear that he still abides by the general principles laid down in the 1958 constitutional White Paper?

Mr. Macleod: I do not think that supplementary question is susceptible of an answer "Yes", or "No". The general principles I should not find at all difficult to accept, but some of the special applications have caused a great deal of trouble.

Mr. Callaghan: May I ask two supplementary questions? First, can the Secretary of State tell us what reason has been given by the United Federal Party for not coming to the conference? Why does not it sit down with the rest round the table in order to discuss whatever propositions are being put forward? My second question is this. Has the right hon. Gentleman looked up the records, and if so, will he remind Sir Roy Welensky that the firmest assurances were given in this House in 1953, 1954, 1955, 1956 and 1957 that the territorial advancement of the individual States would not be held up because of the representations made by the Federal Government; that the Federal Government had the right to be consulted but not to delay any territorial advance?

Mr. Macleod: With respect, the hon. Member is merely repeating—perhaps, if he likes, in better chosen words—what I have already said twice. The final decision remains with Her Majesty's Government. That is absolutely clear. It is also absolutely clear that we must consult, and equally clear that in consultation—otherwise consultation is


worthless—we must consider representations that are made. Regarding the hon. Member's first supplementary question, I imagine, although I have not been given formal notice of this, that the reason was that the Federal Prime Minister found unsatisfactory the message he was sent from Her Majesty's Government some weeks ago.

Mr. Callaghan: rose —

Mr. Speaker: I am sorry but we are getting behind. Miss Vickers.

Mr. Biggs-Davison: On a point of order. I have never done this before, but, in the absence of an assurance, I beg to give notice that I shall seek to raise this matter on the Adjournment.

Secondary Education

Mr. Stonehouse: asked the Secretary of State for the Colonies what steps he is taking to increase the provision of secondary education in Northern Rhodesia.

Mr. Iain Macleod: The Northern Rhodesia Government have provided in their current development plan for a substantial increase in the existing facilities for Africans at all levels of secondary education, as well as improving courses and facilities at existing schools.

Mr. Stonehouse: In view of the fact that great concern has been felt on both sides of the House about the provision for secondary education since the matter was raised by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), will the Colonial Secretary pay special attention to this problem and consider sending out an educational expert to see if the dynamic can be increased?

Mr. Macleod: I am always looking for ways to help in this particular problem. I shall certainly consider that suggestion.

Mr. Swingler: When the Colonial Secretary talks about a substantial increase and a substantial amount being done now, does he recall that last week his hon. Friend told me that, by 1963, only 2 per cent. of African children will get secondary education in Northern Rhodesia and less than 1½ per cent. in Nyasaland? Does not he agree that this matter requires urgent action?

Mr. Macleod: I agree that the figures are very small indeed. These two Territories are spending a high percentage of their current budgets on the problems of education. Where I can help them through the Colonial Development and Welfare Fund I shall do so.

Oral Answers to Questions — MALTA

Employment

Mr. Awbery: asked the Secretary of State for the Colonies what steps have been taken in Malta to provide employment for men who will become redundant; and what plans for new industries are in hand.

Mr. Iain Macleod: A number of firms will be opening factories in Malta during the next few months and are being supplied with lists of men becoming redundant. This measure, combined with the continuing high level of employment in the building trade and the present increased rate of emigration, should help to alleviate what is mainly transitional unemployment.
In answer to the second part of the Question, I refer the hon. Member to the Answer given to the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) on 31st January.

Mr. Awbery: Is the Minister aware that the men employed by the Government in Malta and by Messrs. Baileys dry dock were told in December that a number of them would become redundant? Can he tell us what is to become of those men?

Mr. Macleod: In the last few days I have had discussions both with representatives of the G.W.U. and the Confederation of Malta Trades Unions, and they have put some very helpful suggestions to me. If the hon. Member will study the detailed Answer given to his hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes), he will see that a great deal is going on in Malta. I am encouraged by the employment prospects there. I agree that there may be a short-term difficulty, but I think that the longer-term outlook is good.

Mr. Callaghan: Is the right hon. Gentleman aware that we have been dissatisfied with the answers he has given


over a number of months on this question? Can he tell us what the figures are? Is unemployment increasing at present? If so, what short-term measures do the Government propose to take in order to alleviate the situation?

Mr. Macleod: Unemployment has certainly been increasing. As I have said, I think that this will be a shortlived phase. I am thinking not of years but of a comparatively short time in 1961. As for the measures to be taken, that question was gone into in great detail partly in answer to this Question and particularly in answer to the other Question to which I referred the House.

Mr. Callaghan: But is there not something the Government could do in ship-repairing almost immediately? Would not that alleviate the short-term difficulty that the Minister foresees?

Mr. Macleod: The hon. Member is probably thinking of the dockyard conversion. Above everything else, it is true that this is the most important step that could be taken, and discussions on that matter are at an advanced stage.

Mr. Hector Hughes: On a point of order. Did the Minister say that he was answering Question No. 19 with this Question?

Mr. Speaker: No.

Post Office (Withheld Books)

Miss Vickers: asked the Secretary of State for the Colonies why books ordered by two British Service men from the Marriage Guidance Council, namely,Sex in Marriage, The £ s. d. of Marriage,andAll About Your Wedding, were withheld by the General Post Office, Malta, and classed as indecent publications.

Mr. Iain Macleod: I am informed by the Governor that on the information given it has not been possible to trace these particular cases. Publications of this kind have, however, been detained by the postal authorities in Malta under the provisions of the Post Office Act.

Miss Vickers: Will my right hon. Friend reconsider this decision in view of the fact that people get married much younger in these days? Is it not very desirable that they should have a copy of this type of book? If they cannot have it, may the copies be returned to headquarters and not burnt?

Mr. Macleod: I am sure that that argument would be right for this country but we must realise the situation—[HON. MEMBERS: "Oh."] With respect, Service men are subject to the territorial law of the country in which they are serving. Everyone must know that in a country like Malta these matters are looked upon very differently from the way in which they are regarded here.

Miss Vickers: If it were a Muslim country, would they be refused a Bible?

Mr. Macleod: No, of course not. This is not a new practice, and it is not a new Act.

Dockyard (Labour Force)

Mr. Hector Hughes: asked the Secretary of State for the Colonies if he is yet in a position to state the result of the consultations between the Governor of Malta and Messrs. Baileys regarding the number of workers in each trade there employed and unemployed, respectively, in connection with the Malta dockyard for each year since it was taken over by Messrs. Baileys, and up to the latest convenient date.

Mr. Iain Macleod: The total labour force in the dockyard when it was handed over to Messrs. Baileys in March, 1959, was 6,300. The company informs me that, for commercial reasons, it does not wish detailed figures to be disclosed, but that the average number employed at present is 5,750.

Mr. Hughes: Does the Secretary of State agree that employment conditions in Malta are difficult? Would it not be better to bring out the full facts so as to confront these problems with a view to solving them? Will he do that and give me all the figures for which I have asked?

Mr. Macleod: No, I can remember many times when I was Minister of Labour refusing a similar request by hon. Members of this House. It is quite common practice for firms, for very good reasons, not to go into too great detail in these matters, but the difference between these two figures is in fact accounted for by normal wastage and there have been no discharges at all in this period, except an occasional one for misconduct.

Oral Answers to Questions — SIERRA LEONE

Opposition Parties (Election Proposals)

Mr. Marquand: asked the Secretary of State for the Colonies what further representations he has received from Opposition parties in Sierra Leone concerning the desirability of holding elections in that country before it attains independence.

Mr. Iain Macleod: I have received telegrams from Mr. Wallace Johnson and a copy of a resolution passed by a meeting of the All Peoples Congress on 1st January in support of the holding of a general election before independence.

Mr. Marquand: Is the Minister aware that when I was in Sierra Leone recently a great deal of propaganda was going on to the effect that if there were no elections before independence the present Government in Sierra Leone would see that there were no elections afterwards? Is he further aware that I found little or no foundation for that propaganda? Is that his impression also?

Mr. Macleod: It is a difficult question to answer. I cannot give an undertaking that General Elections will be held after Independence. That would not be my place, nor would it be the place of anybody in this country. But, like the right hon. Member, I have no reason whatever to doubt that General Elections will be held. The agreement not to hold them before independence was part of the Lancaster House agreement, and there was only one dissentient from it.

Oral Answers to Questions — SARAWAK

Port of Kuching Consultative Committee

Mr. Oram: asked the Secretary of State for the Colonies which members of the Port of Kuching Consultative Committee represent the organised workers in the port.

Mr. Fernyhough: asked the Secretary of State for the Colonies if the trades unions in Kuching, Sarawak, were asked to submit the name of one of their members to serve on the recently established Port of Kuching Consultative Committee.

Mr. H. Fraser: No representative organisations were consulted about appointments to the Port of Kuching Consultative Committee, which is an interim committee to make recommendations about the operation of the new port and the formation of a port authority. Labour interests are represented by a member of the Kuching Municipal Council. On occasions the Chairman of the Wharf Labourers Union is invited to attend meetings.

Mr. Oram: Is not it the case that this Committee is weighted by representatives of the employers and financial interests? Since one of its functions is to make recommendations about personnel establishments and conditions of employment in the port, is not it highly important that representatives of the trade unions should be on the Committee?

Mr. Fraser: The Committee has recommended that the constitution of the port authority should have an unofficial majority, and we are consulting the First Division Trade Union Congress on this matter of representation when the body is actually in being and in operation.

Mr. Fernyhough: Would not the hon. Gentleman agree that trade unionists have a greater interest than any other body in the decisions which will be taken by this Consultative Committee? Does not he recognise that if they are shabbily treated now, while they are weak, they may act irresponsibly when they are strong? Would not it be wise to see that they are in at the beginning of these talks?

Mr. Fraser: I think that their interests are safeguarded. In point of fact, at the time of the appointment of the Committee there was no organised trade union system in Kuching. That matter has been remedied, and we shall make sure that they are properly represented on the port authority when it is established.

Oral Answers to Questions — BRITISH GUIANA

Denominational Schools

Mr. Biggs-Davison: asked the Secretary of State for the Colonies what representations he has received from religious and other leaders and bodies in British


Guiana about the proposed transfer to the Government of the Colony of fifty-one denominational schools.

Mr. H. Fraser: Representations have reached my right hon. Friend from the British Guiana Christian Social Council, the Methodist Church in British Guiana and the leader of the National Labour Front protesting against the intention of the British Guiana Government to assume control over fifty-one aided denominational primary schools built on church lands entirely out of public funds.

Mr. Biggs-Davison: Whatever the result of those representations and whatever final decision may be come to in British Guiana, is it the understanding of my hon. Friend that facilities will continue to exist for the religious education of the children in these schools?

Mr. Fraser: Yes, Sir. Religious instruction according to the denomination of the school concerned will be continued in the fifty-one schools to be taken over.

Oral Answers to Questions — KENYA

Law and Order

Sir A. Hurd: asked the Secretary of State for the Colonies if, in view of the present election tension in Kenya and the fears of political intimidation, he will renew the assurances given by Her Majesty's Government to people of all races in Kenya that the police will be maintained at full strength and will have the support of the armed forces of the Crown in maintaining law and order in the Colony during the election period and for as long afterwards as the Governor considers necessary during the stages of constitutional advance to responsible government.

Mr. Iain Macleod: Yes, Sir. I renew those assurances now. But I am satisfied that the Governor is adequately equipped to deal effectively with threats to law and order and he will, I know, not hesitate to act promptly at any time should the need arise.

Sir A. Hurd: Will my right hon. Friend tell the Governor that many of us are watching anxiously, and still with some hope, what is happening in Kenya? Will he tell the Governor also that we want him to have all the

resources that he needs to deal firmly with disorder, such as any possible uprising of Mau Mau, and with political intimidation wherever carried out and whatever may be the colour of the skin? Will my right hon. Friend give the Governor assurances of full support from this House?

Mr. Macleod: Yes, indeed. In answer to the middle part of my hon. Friend's supplementary question, I have been closely in touch with the Governor on this matter. I am entirely satisfied that the police force is strong enough to deal with any ordinary threat to law and order, and that all the powers he will need are available to him.

Oral Answers to Questions — GAMBIA

Situation

Mr. McLaren: asked the Secretary of State for the Colonies whether he will make a statement on the strike and the present situation in the Gambia.

Mr. Iain Macleod: A claim for an increase in the basic pay of daily-rated workers by 4s. 6d. a day was presented in the joint industrial councils on 14th January. The Gambia Workers Union demanded an immediate settlement and from 21st January until the 27th a widespread strike of daily-rated labour took place. Return to work followed an informal agreement by the commercial firms to grant a wage increase of 8d. a day for daily-rated labour. This has since been agreed by the joint industrial councils affecting commercial and Government labour. The situation is now calm.

Mr. McLaren: Do not these incidents show the need to renew the study of the economic destiny and viability of the Gambia in the modern world?

Mr. Macleod: That is a very wide question, but of course it is so. The Gambia is a peculiarly difficult problem to solve and there may well have been some political element in this particular occurrence.

Mr. Marquand: Is the Colonial Secretary aware that some of us who have been in the Gambia recently feel that a great deal more can be done by this country aiding the Gambia economically


so that it can face the question of its future with more confidence? I know that it is difficult for the right hon. Gentleman, but could he find a little more time to study the problem himself?

Mr. Macleod: Yes, I have been doing that. I have recently seen the Governor and Ministers from the Gambia, but economic help, of course, does not remove the fundamental difficulty of what in a sense—looking at it geographically—is an anomaly on the West Coast of Africa, and it is a very difficult problem to solve.

Oral Answers to Questions — NYASALAND

Electoral Provisions (Order in Council)

Mr. Wall: asked the Secretary of State for the Colonies what consultations he had with the Nyasaland Executive and Legislative Councils, or with the members of the Nyasaland Constitutional Conference, before the promulgation of the Nyasaland (Electoral Provisions) Order in Council, 1960.

Mr. Iain Macleod: These Regulations were based on the Report of the Working Party set up in accordance with the decision of the Constitutional Conference to study the detailed arrangements for the franchise and the elections. The Governor and I considered this Report in detail both through correspondence and in discussion with the delegates to the Constitutional Conference, before the Regulations were made. There was no consultation with the Executive or Legislative Councils as such, although my hon. Friend will appreciate that most of the members of these Councils were associated with the Conference and were therefore consulted in their capacity as delegates.

Mr. Wall: Would not my right hon. Friend agree that it would have been better to have given time for the Executive Council and the Legislative Council in turn to discuss and debate this problem before promulgating this Order?

Mr. Macleod: No. With respect, I think that the method adopted was a better one. The difficulty about discussing the matter in the Legislative Council would have been that it would

be a very one-sided discussion, because many of the important delegates to the Conference, such as those from the Malawi Party, would not be represented. It would, therefore, be better to have the sort of discussions I have indicated.

Mr. F. M. Bennett: asked the Secretary of State for the Colonies (1) if he will allow aliens to register for voting in the Nyasaland General Election; and whether he will make a statement; and
(2) how many aliens he expects will be able to register to vote in the Nyasaland General Election under the provisions of the Nyasaland Electoral Provisions Order in Council, 1960.

Mr. Iain Macleod: The Regulations were based on the recommendations of the Working Party Report established by the 1960 Constitutional Conference. The members of the Working Party pointed out that a large number of Africans who were fully integrated into the population and had long been recognised as belonging to Nyasaland were neither British nor British protected persons. They added that there was no administrative way in which these persons could be distinguished and recommended that they should be enfranchised. I accepted this recommendation. The number involved cannot be accurately estimated.

Mr. Bennett: Although, obviously, we all recognise the difficulties involved, could the Colonial Secretary say whether there is any precedent for an Order of this nature enfranchising those who are aliens? Secondly, can he say in that context whether, apart from local consultations—which seem to have been lacking in certain respects, judging by an Answer to another Question—he thinks a step of this constitutional importance ought to have been taken by an Order without the House being consulted?

Mr. Macleod: I do not think that this is quite such a departure as might on the face of it appear. Citizens of the Irish Republic, for example, are entitled to vote in United Kingdom elections. On the general problem, the Working Party, composed of the Senior Administrative Officer and the Solicitor-General, said that there was no conceivable way in


which these people could be distinguished and there is no evidence of birth. That being so, it seems that one either had to disfranchise the whole area or enfranchise the whole area. The recommendation of the Working Party that they should be enfranchised was, I thought, the right view to take and I accepted it.

Mr. Bennett: On a point of order. I appreciate, Mr. Speaker, that I am debarred from making further comments at this stage. I will content myself by saying that, in view of the importance of this issue, I feel bound to raise the matter on the Adjournment on the earliest possible occasion.

Oral Answers to Questions — RHODESIA AND NYASALAND

Secondary Education

Mr. Fisher: asked the Secretary of State for the Colonies whether, in view of the small proportion of African children receiving secondary education in Northern Rhodesia and Nyasaland, Her Majesty's Government will provide additional financial assistance for secondary education over and above that available from the territorial budgets.

Mr. Iain Macleod: Grants are already made available for this purpose from Colonial Development and Welfare Funds, and over the last five years Her Majesty's Government have made grants for secondary educational projects totalling £204,625 for Nyasaland and £153,316 for Northern Rhodesia.

Mr. Fisher: I know my right hon. Friend the Chancellor of the Exchequer has been very co-operative about funds for colonial projects, but, in view of the gradual transference of political power and administrative responsibility and the very small number of African children who are receiving secondary education, will my right hon. Friend the Colonial Secretary give a rather high priority to this matter when next he makes a financial request to the Treasury?

Mr. Macleod: Yes, I am sure I can give that undertaking. There is nothing I rank higher than the needs of African education in Africa.

Oral Answers to Questions — UGANDA

Sudanese (Political Asylum)

Mr. Wall: asked the Secretary of State for the Colonies how many ex-Members of the previous Sudanese Parliament have sought political asylum in Uganda; whether asylum has been granted in all cases; and what application has been made by the Sudanese Government for their return.

Mr. Iain Macleod: Six Sudanese, including five ex-Members of the Sudanese Parliament, entered Uganda on 23rd December seeking political asylum. The Sudan Government in a Note to Her Majesty's Government has asked for their return. These persons have been issued with permits under the Control of Alien Refugees Ordinance pending a decision about their future. As to this, I am in consultation with my right hon. and noble Friend the Foreign Secretary, and the Governor.

Mr. Wall: Would my right hon. Friend undertake to say again that genuine political refugees would be given asylum in Uganda?

Mr. Macleod: The permits to which I referred laid down that there shall be no repatriation unless one is assured that they will be neither tried nor punished for a political offence, nor subjected to physical attack.

Oral Answers to Questions — CAMEROONS

British Forces

Mr. Tilney: asked the Secretary of State for the Colonies whether British troops will be withdrawn from the Cameroons after the forthcoming plebiscite.

Mr. Iain Macleod: They will be withdrawn by the time United Kingdom Trusteeship comes to an end.

Mr. Tilney: Will my right hon. Friend bear in mind that after next weekend's plebiscite there is likely to be, in the South Cameroons at any rate, a large and dissatisfied minority? Should the vote go in favour of the Cameroon Republic, where civil war appears almost endemic, will he bear in mind the necessity of keeping British troops at risk


for the shortest possible time in a country where there is no Commonwealth interest?

Mr. Macleod: Yes. I will certainly bear those interests in mind, but, naturally, security over these Territories lies with us as the administrative Power.

Oral Answers to Questions — SCOTLAND

Intestate Succession (Mackintosh Report)

Mr. Hector Hughes: asked the Secretary of State for Scotland on what date he received from the Council of the Scottish Law Agents Society the resolution passed by it on 15th December, 1960, and sent to him, concerning the recommendations of the Mackintosh Report on the law relating to intestate succession in Scotland; and if he will now take steps to implement the recommendations contained in the Report.

The Secretary of State for Scotland (Mr. John Maclay): The Society's resolution reached me on 16th January. As already indicated in the reply that I gave to the hon. Member for Edinburgh, East (Mr. Willis) on 31st January, I have informed the Society that I see no prospect of legislation to amend the law of intestate succession during the current Session of Parliament.

Mr. Hughes: Does the right hon. Gentleman realise that that Answer is outrageous? This matter has important professional, social and business bearings, and much damage is being done by the delay. Will he revise his Answer and take steps to have the recommendation implemented as soon as possible?

Mr. Maclay: No. I see no possibility of revising the Answer. As the hon. and learned Gentleman knows, there is a great deal of business before the Scottish Committee and I can see no opportunity of bringing any further legislation before it this Session.

Marginal Agricultural Production Grants

Mr. Willis: asked the Secretary of State for Scotland whether he will make a statement on the operation of Marginal Agricultural Production grants in Scotland for 1961.

Mr. Maclay: The present marginal agricultural production scheme in Scotland covers the three cropping seasons 1960, 1961 and 1962. The Agricultural Executive Committees are in the course of making their preparations for the 1961 cropping season.

Fisheries (Research)

Mr. Willis: asked the Secretary of State for Scotland whether, in view of the reports of the International Geophysical Year, it is proposed to carry out any research into changing ocean temperatures around Scotland and the effects upon Scottish fisheries.

Mr. Maclay: Research of this kind has been carried out by the scientists in my Department for many years and will be continued.

Mr. Willis: In view of the claims which are being made in the campaign being conducted against the Hydro-Electric Board, will the right hon. Gentleman say whether any of this research is devoted to the effects on salmon?

Mr. Maclay: The connection of thought between the International Geophysical Year and the Hydro-Electric Board is too much for me at Question Time.

Trade Improvements (Redevelopment Areas)

Dr. Dickson Mabon: asked the Secretary of State for Scotland why he does not sanction grants to aid local authorities for street improvements concurrently with town redevelopment work when such improvements are within the redevelopment areas.

Mr. Maclay: I try to do this whenever I can, since road works are often fundamental to redevelopment. But I have to keep a reasonable balance between competing road schemes, whether in redevelopment areas or elsewhere.

Dr. Mahon: Does not the right hon. Gentleman realise that this involves a great deal of public waste in making and remaking streets and that in the central development area in my own constituency such a thing is going on in front of the citizens, all of whom know


that the street will have to be remade when the right hon. Gentleman sanctions the additional improvement?

Mr. Maclay: I know that the hon. Member is raising a particular point which has arisen in his constituency. If there are any further details which it would be useful for the town council to discuss with my Department, when the time comes that will certainly be done.

Remote Areas (Housing Subsidies)

Mr. Grimond: asked the Secretary of State for Scotland what assistance he proposes to give to local authorities in Temote areas whose housing costs are above the top band on the new scale of subsidies.

Mr. Maclay: Where I am satisfied that the cost of houses in a particular scheme necessarily exceeds the maximum of the top band, the rate of subsidy will be calculated by adding to the rate for that band an allowance for the excess cost.

Mr. Grimond: Local authorities will be glad to hear that, because I understand that it is an improvement on the Secretary of State's previous proposal. Apart from the general housing difficulties in the far North, it appears that the new policy, at any rate as it was interpreted, involved reducing the grants in aid on schemes already completed. If that had been enforced it would have been a breach of faith with the local authorities.

Mr. Maclay: I should have to look into that. I could not reply to the detail of it without notice.

Mr. John MacLeod: May I draw my right hon. Friend's attention to the fact that in my own constituency we are very worried that he has separated site costs and housing costs? Why has he done this?

Mr. Maclay: That is another point of detail which I shall be glad to look into and write to my hon. Friend about.

Revaluation Estimates (Appeals)

Dr. Dickson Mabon: asked the Secretary of State for Scotland if he will consider taking steps to lengthen the two-month period for appeal against

revaluation assessments issued on or before 31st May, 1961, in view of the large amount of work involved.

Mr. Maclay: I am prepared to consider this question when further information is available about the probable volume of appeals.

Dr. Mabon: In reconsidering this matter, I hope that the right hon. Gentleman will take into account the representations being made by various professional bodies, including the chartered surveyors, which are pointing out publicly, and I hope to him privately, that there will be a volume of appeal here over ground which is difficult for the ordinary citizen to participate in?

Mr. Maclay: I will watch this situation very carefully as soon as the information becomes available on which to base decisions.

Mr. McInnes: Will the Secretary of State consult the Scottish Valuation Advisory Council?

Mr. Maclay: Yes. I should be bound to consult the Council before I took any action

Clyde Tunnels (Cost)

Mr. Rankin: asked the Secretary of State for Scotland what additional cost to public funds will result from the expected fifteen months' delay in the completion of the Clyde tunnels.

Mr. Maclay: Any addition to the cost to public funds as a result of delays will require to be negotiated in due course by Glasgow Corporation with the contractor in terms of his contract and I am advised that it is impossible to forecast at this stage what the result might be.

Mr. Rankin: Does the right hon. Gentleman agree that the contracting company has a responsibility, because the nature of the soil must have been known had the information been sought? The delay in obtaining the shields was well publicised in the House. Is the right hon. Gentleman saying that the company may escape its obligations?

Mr. Maclay: No. My Answer meant that part of the cost may fall to be met by the contractor and another part will be covered by the provision made in the


contract for protective measures found necessary during the work. We cannot forecast this at this stage.

Teacher Training

Mr. Rankin: asked the Secretary of State for Scotland whether he has yet received any comments on the proposals for the training of teachers which he has circulated among interested organisations.

Mr. Maclay: I have had comments from thirty-one of the thirty-seven bodies which received the memorandum. It made no proposals, but merely set out the questions calling for consideration in a fundamental review of teacher training.

Mr. Rankin: If, as the right hon. Gentleman states, he has made no proposals, why does the teaching profession, as represented by its national organisations, believe that he has made proposals, which the profession has criticised adversely on the ground that they will lower the status of entry to the teaching profession?

Scheme
Starting date
Estimated completion date
Estimated total cost





£


TRUNK ROADS





 A.8—Improvement at B.M.C. site, Bathgate (see also under classified roads)
October, 1960
Summer, 1961
235,000


 A.985—Torryburn Bypass (including bridge over Bluther Burn)
November, 1960
Summer, 1962
414,000


 A.73—Recons ruction of Braidwood Bridge
December, 1960
Autumn, 1961
110,000


CLASSIFIED ROADS





 A.850—Reconstruction between Sligachan Inn and Sconser Lodge, Skye
July, 1960
Summer, 1962
191,000


 A.859—Reconstruction between Tarbert village and Horsaclett Lodge, Harris
 August, 1960
Summer, 1962
154,000


 A.89/B.792—Improvements connected with B.M.C. proposals, Bathgate (see also under trunk roads)
October, 1960
Summer, 1961
214,000


 A.724—Improvements at Main Street, Cambuslang and Halfway connected with Comprehensive Redevelopment at Cambuslang
October, 1960
 Autumn, 1961
120,000


 Potential Reconstruction and Widening, Class I, of Edmiston Drive, Glasgow
December, 1960
Winter, 1962
173,000

Slum Clearance

Mr. Manuel: asked the Secretary of State for Scotland the number of slum dwellings demolished during 1960.

Mr. Maclay: Under statutory procedures involving formal declaration of unfitness, up to 8,500 houses have

Mr. Maclay: I hope that all concerned will consider this matter objectively. What was done was to put out a number of possible courses of action, all of which needed consideration if we were to find the right answer about the future of teacher training in Scotland. All we ask is that these should be considered. When we receive the reports and the reactions of the various bodies, we will look at them very carefully before reaching any decisions.

Road Programme

Mr. W. Baxter: asked the Secretary of State for Scotland if he will give the number and names of schemes under the road programmes costing over £100,000 which were started in the six months ended 31st December, 1960, with estimated completion date and the total cost of each.

Mr. Maclay: As the Answer contains a table of figures I will, with permission, circulate it in the OFFICIAL REPORT. There are eight schemes in all.

Following is the table:

probably been taken out of use, but a firm figure is not yet available.

Mr. Manuel: May I take it that the Secretary of State has given the figure for 1960, which I asked for in my Question?

Mr. Maclay: I answered the Question. I gave the figure for 1960.

Oral Answers to Questions — SECRETARY OF STATE FOR FOREIGN AFFAIRS (SPEECHES)

Mr. Frank Allaun: asked the Prime Minister if the speeches made by the Secretary of State for Foreign Affairs on relations between East and West, in London on 11th January, 1961, in Washington on 19th September, on the British Broadcasting Corporation on 7th December and in Paris on 16th December, 1960, represent the policy of Her Majesty's Government.

The Prime Minister (Mr. Harold Macmillan): Yes, Sir. I am glad that the hon. Member has read these speeches by my noble Friend the Foreign Secretary. I am sure they will be very good for him.

Mr. Allaun: Is it not a fact that all these speeches went out of their way to attack Russia or China, and were in sharp contrast to the Prime Minister's friendly speeches during and after his visit to Russia? Will the Prime Minister tell the Foreign Secretary that he is the Foreign Secretary and not the "Minister for Cold War", and that these attacks are the worst possible way to secure conciliation between the two countries?

The Prime Minister: No, Sir. I think that it is right that the Western case should not go by default, and that our position should be stated. At the same time, the Foreign Secretary and all Ministers have been at pains to stress that we are ready at any time to enter into negotiations with the Soviet Union, and this is the policy of the Government.

Oral Answers to Questions — UNITED NATIONS GENERAL ASSEMBLY

Mr. Prentice: asked the Prime Minister whether he will go to New York in March to attend the resumed meeting of the General Assembly of the United Nations.

The Prime Minister: I have nothing to add to what I said on 2nd February.

Mr. Prentice: While appreciating the importance of the Commonwealth Prime Ministers' Meeting, which clashes with the General Assembly, may I ask whether it now seems possible that there will be a converging of world leaders on New York in March, as there was in the

autumn? Will the right hon. Gentleman see that the British delegation is led by a senior Minister, and still keep open the possibility of going himself?

The Prime Minister: All these considerations have to be borne in mind. The calendar gets rather overcharged with these possible meetings, but I will keep in mind what the hon. Gentleman says.

Oral Answers to Questions — MEMBERS OF ARMED FORCES (SPEECHES)

Mr. Woodburn: asked the Prime Minister whether, in order to avoid misunderstanding which might prejudice his efforts to relieve world tension, he will take steps to ensure that the speeches of officers and other ranks in Her Majesty's Forces shall be exercised with restraint in a manner which will not conflict with Government policy.

The Prime Minister: No, Sir. I see no reason for any special steps. As my right hon. Friend the Minister of Defence explained on 15th December, 1959, officers of the three services are already required to seek permission from the Minister of their Service before making public statements on matters bearing on their service.

Mr. Woodburn: Does this not apply to field-marshals who, I understand, are theoretically still serving officers? Are Lord Montgomery's speeches universally helpful to the right hon. Gentleman in his international negotiations, and would not it be possible delicately to suggest to Field-Marshal Montgomery that his estimate of great men is not necessarily final and the last word of wisdom?

The Prime Minister: Field-marshals have always been accepted as being in a somewhat special category.

Oral Answers to Questions — OFFICIAL VISITS TO SOUTH AFRICA (COLOURED PEOPLE)

Mr. Shinwell: asked the Prime Minister what new instructions he has given to Government Departments to refrain from excluding coloured people from official parties visiting South Africa.

Mr. Brockway: asked the Prime Minister if he will instruct all Departments of Her Majesty's Government to


refrain from excluding coloured persons from the personnel associated with official visits to South Africa.

The Prime Minister: The composition of the party for any official visit to South Africa will be decided on each occasion in the light of the circumstances.

Mr. Shinwell: Does that reply mean that the Prime Minister has not a word of condemnation of what has happened, arising from the decision of the Admiralty to exclude some coloured ratings from H.M.S. "Victorious", or that kind of farcical procedure? May we have an assurance from the right hon. Gentleman that it will never be repeated?

The Prime Minister: We have to consider each circumstance on the balance of advantages. At the same time, I was glad to see a letter from the Mayor of Cape Town in The Times this morning which seems to be a helpful sign.

Mr. Shinwell: Was the action of the Admiralty consistent with the sentiments expressed by the right hon. Gentleman at Cape Town?

The Prime Minister: We have discussed this at some length, but I really think that each case has to be considered on its own. What we have to try to do is to get the balance of advantage or disadvantage. At any rate, I do not think that there is any doubt about the sentiments of Her Majesty's Government on this matter.

Mr. Brockway: When the Prime Minister says that these matters will have to be decided on the merits of each case, is he aware that when the subject of H.M.S. "Victorious" was raised, the Minister replied that this was the general practice of the Admiralty and that it was not related to the particular case? Is the Prime Minister aware that in the Admiralty Intelligence Circular of April of last year the withholding of coloured people from naval vessels visiting South Africa was laid down as a matter of policy? In view of that, will the right hon. Gentleman assure us that this conduct will not be continued, and will not be extended to other Departments?

The Prime Minister: What I meant was that we have to consider whether such visits should take place or should

not. What I am not prepared to do is to allow British subjects serving in our Forces to be liable to be subjected to bad treatment.

Mr. G. Brown: But has the Prime Minister taken note of the strength of feeling in the House on both sides—it was expressed on that side of the Chamber as well as on this last time we discussed it—that if, in fact, on any particular date we cannot send a party of our citizens there and be sure that someone will not be badly treated, it would be better simply not to go?

The Prime Minister: That is really what I meant in what I have just said.

Mr. Driberg: When the Prime Minister refers to the letter from the Mayor of Cape Town, could he kindly say whether he believes what is stated in that letter? If so, does not that make the action of the Admiralty pointless?

The Prime Minister: I merely instanced it. I thought that it was an encouraging sign that such a letter had been sent.

Mr. C. Royle: Will the Prime Minister say whether or not there is any discrimination between black and white when recruits come to the Forces? If they are not seen at that time, is there any reason why they should be seen at times when visits are made to South Africa?

The Prime Minister: As far as I know, there is no discrimination, but I will look into the matter.

Oral Answers to Questions — RELATIONS WITH U.S.S.R.

Mr. Pentland: asked the Prime Minister, in view of improved Soviet-American relations, what action he now intends to take, in collaboration with the heads of Government of France and the United States of America, to improve relations between Russia and the United Kingdom.

The Prime Minister: As I reminded the House on 24th January, the three Western Powers issued a statement in Paris after the failure of the Summit Conference stating that they were ready to take part in negotiations at any suitable time in the future. This remains our policy, and we will act accordingly.

Mr. Penrland: I welcome that reply, but will the Prime Minister assure the House that he will not allow any disappointment he may have felt over the failure of the Summit Conference in Paris last year to deter him, during his forthcoming talks with President Kennedy, from proposing the desirability of once again making a combined approach to Mr. Khrushchev in order to discuss the possibility of another Summit Conference in 1961?

The Prime Minister: All these things must, of course, be discussed. Certainly, disappointments should not rule one's sentiments; they should be a spur to further action

Oral Answers to Questions — MINISTERS OF THE CROWN (PRIVATE INTERESTS)

Mr. Emrys Hughes: asked the Prime Minister if he will consider making a rule that Members of the Government shall sell all shares in private and public companies on taking office and invest only in Government and municipal securities.

The Prime Minister: The principle at issue here is that Ministers should so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties. I am satisfied that the existing rules are sufficient to safeguard this principle.

Mr. Hughes: Is the right hon. Gentleman aware that it is quite possible now for a member of the Government to have shares in armament firms, and to have brewery shares and property shares, all of which have gone up as a result of the policy of Her Majesty's Government? Is he aware that in the United States of America the President and the Attorney-General have voluntarily decided that they will invest only in Government securities, and that the United States Minister of Defence, Mr. McNamara, has recently been before a Senate Committee which has compelled him to sell all his armament shares?

The Prime Minister: The rules which have governed our affairs for a good number of years are well known. I would call the hon. Gentleman's attention to the fact that we last circulated

them in the OFFICIAL REPORT on 28th January, 1960. I do not think that they require amendment.

Oral Answers to Questions — PARLIAMENTARY SECRETARY FOR SCIENCE

Mr. F. Peart: asked the Prime Minister if he will now appoint a Parliamentary Secretary for Science responsible to the House of Commons for answering questions on scientific policy and the duties of the Lord President of the Council.

The Prime Minister: I would refer the hon. Member to the Answer which I gave to the hon. Member for East Ham, North (Mr. Prentice) on 31st January.

Mr. Peart: Why is there this long delay in appointing a Minister in the House to be responsible for Parliamentary Questions, and to answer also for the Minister for Science? Why the delay? Why should the Prime Minister be so complacent about it?

The Prime Minister: The first thing we had to do was to get a Bill through the House of Commons and the House of Lords to enable us to do that. That we have done, and we are now in a position to act.

Mr. Peart: That is a long time ago—is there a rift in the family, or something?

The Prime Minister: No, Sir. As the House observed yesterday, the hon. Member for Halifax (Mr. Maurice Macmillan) has both intelligence and independence. How he got hem, it is not for me to say.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS (ESTIMATES)

Mr. Donnelly: asked the Prime Minister if he will instruct ail Ministers to prepare their estimates of expenditure and income on a three-year basis.

The Prime Minister: For many years forecast estimates covering the two years following the year of submission have been provided by Departments for the Treasury. In addition, much progress has been made in recent years in


developing the "forward looks" referred to in paragraph 10 of the Treasury observations set out in the Seventh Special Report from the Select Committee on Estimates, Session 1958–59. The resulting studies are still being considered by the Government and are proving useful in giving a general view of expenditure.
Estimates of income in the coming year are primarily a matter for the Budget being prepared by my right hon. and learned Friend the Chancellor of the Exchequer, and I cannot at this stage consider publishing similar estimates for a longer period ahead.

Mr. Donnelly: Does the Prime Minister realise that it would be of considerable advantage to British industrialists if they had a much longer-term introduction to what the Government propose to do at any given time in economic affairs, and does he realise that it would be of considerable advantage to business also, even if it might be a handicap to politicians?

The Prime Minister: I think that the estimates of expenditure which we are now trying to indicate are very valuable to us. I do not quite know what the hon. Gentleman means by "income", but I assume that he means revenue. Of course, one can estimate forward appropriations in aid. Revenue must depend upon Budget decisions in each year.

Sir G. Nicholson: No doubt these and kindred subjects are being considered by the Plowden Committee. Has my right hon. Friend any news for the House about the progress of that Committee, and can he say anything about the extent to which its findings will be communicated to Parliament?

The Prime Minister: I would rather have notice of that question, or perhaps my hon. Friend could put it to the Chancellor of the Exchequer.

At the end of Questions—

QUESTIONS TO MINISTERS

Newspaper Industry

Mr. Mayhew: On a point of Order, Mr. Speaker. In view of the public interest in the proposed Press merger, may we ask the Prime Minister to answer Questions on that subject?

The Prime Minister: I propose to make a further statement on Thursday next, the day after tomorrow.

References to Royal Family

Mr. Rankin: After your Ruling yesterday, Mr. Speaker, on my supplementary question to Question No. 25, I looked at volumes of HANSARD covering the last ten years. I found many references to the Royal Family. Whether or not the statements made in those exchanges and speeches cast reflections seemed to be a matter of interpretation. I thought that my supplementary question could well come within that category. In view of your Ruling, Sir, would you say quite definitely under what conditions references to the Royal Family may be made in this House?

Mr. Speaker: I ruled the hon. Member's supplementary question out of order because it is my duly, in the service of the House, to maintain the rule about questions to which I referred him yesterday. There is nothing new about it. The rule is, as far as I know, at page 358 of Erskine May. I cannot discuss it now. I am grateful to the hon. Member for not persisting yesterday at what the House might have thought was an inappropriate moment, but I really cannot invent any reason for discussing my Ruling now.

George Riley

Mr. S. Silverman: May I raise with you, Mr. Speaker, a matter of order of which I gave you notice in my letter of yesterday afternoon? I will endeavour to be as short as possible and not transgress the rules of order in putting my point Ho you in what you will appreciate are difficult and delicate circumstances.
I handed in to the Table yesterday afternoon a Question which I think I am bound to describe; otherwise, the point will not be understood. I wished to ask whether the Home Secretary would order an inquiry into the case of George Riley to see whether there had been any miscarriage of justice. You will appreciate, Sir, that there is nothing in the Question which refers to the charge, to the result of the trial or to the sentence, though I am bound to concede that it is common knowledge that Riley was charged with and convicted of capital murder.
The Question was, in the first place, accepted in the Table Office. Later, I was asked to speak to the Clerk of the Table, who ruled that it was out of order and so clearly out of order that he did not think it necessary to reconsider it. He refused to accept the Question.
The point which I am putting to you for your consideration is, I think, a new one without direct authority. In my submission, if the ruling given is right, it amounts to such an extension of the existing practice as to amount to a real deprivation and inhibition upon Members of Parliament in doing their public duties.
As I understand it, the objection was based on the paragraph in Erskine May relating to inadmissible Questions. The last sentence of the first paragraph on page 358 of the Sixteenth Edition of Erskine May reads:
A capital sentence cannot be raised in a question while the sentence is pending.
It was my submission, and it remains my submission, that my Question did not offend against that rule. It did not raise a capital sentence or any sentence. The Question would have been in exactly the same terms if the man had been fined 2s. 6d. or placed on probation for twelve months. The sentence was not involved and the Prerogative of mercy was involved. All that was involved was the question of setting up an inquiry to see whether there had been a miscarriage of justice such as the Home Secretary has in the past on several occasions ordered and which the Court of Criminal Appeal has laid down as the proper method to pursue in relevant circumstances.
The sentence in Erskine May quotes only one authority, that is to say, House of Commons Debates (1946–47), columns 2179–82. That is the only authority quoted. I have that authority here, Sir, and I submit that it establishes beyond reasonable controversy that the rule relates strictly and solely to Questions relating to the exercise of the Prerogative of mercy. It was, as a matter of fact, a Ruling given by Mr. Speaker Clifton Brown in response to a Question by me following certain events which had taken place in the House in which my hon. Friend the Member for Oldham, West (Mr. Hale) and I were closely concerned. It amounted to a restate

ment of the position in the House with regard to Questions directed to the Home Secretary, or, indeed, to anybody else, involving the exercise of the Prerogative of mercy.
The passage, nearly three columns of it, is headed in HANSARD, "Prerogative of Mercy". Without quoting from it or reading from it at all, I submit that it is perfectly clear that in what Mr. Speaker Clifton Brown had to say he was confining himself solely and absolutely to the limited question of what one can do about the Prerogative of mercy before sentence has been executed.
That question did not arise here. The Home Secretary, of course, cannot be interfered with. Questions cannot be put to him, and nothing of that kind can be done in this case at this moment. The man has to hang, if the Home Secretary says so. Let him do so. We can ask Questions afterwards; and, no doubt, he can refuse to tell us why. That question, however, is not raised here. It is a quite different question. It had nothing to do with the Prerogative of mercy. I submit with some confidence, but with great respect, that the Ruling was wrong and the Question ought to have been accepted.

Mr. Speaker: I am greatly obliged to the hon. Member for giving me notice of this, because it is an important point and I have had time to look at the Rulings of my predecessors.
I am sorry to disappoint his expressed expectation, but I am driven reluctantly to the conclusion that I am governed by precedent in the matter and I should rule the hon. Member's Question out of order. I do not want to take up the time of the House about it.
I understand fully the distinction that the hon. Gentleman is making between an inquiry into what happened at the trial, or the like, and the exercise of the Prerogative of mercy. The difficulty is that on the Rulings the two points are so closely interrelated—I hope to illustrate in a moment why I think that the point is covered by previous Rulings-no doubt for the very obvious reason that the mind of the Home Secretary of the day, in tendering such advice as he would have to give, would necessarily be affected by the propriety or impropriety of the conviction or other proceedings at the trial.
Looking back at the Ruling given by my predecessor on 10th March, 1947, in a case in which the hon. Member for Nelson and Colne (Mr. S. Silverman) was personally involved, and taking some words out of it to show the extent of the protection, as it were, which is laid by our practice around the head and conscience of the Home Secretary from Parliamentary pressure pending the execution of sentence, there came these words:
Moreover, it is obvious, as was laid down by Mr. Secretary Matthews in 1887 and 1889, in the Lipski and Maybrick cases, and has been consistently upheld by the Chair, that"—
then there is a quotation in my predecessor's Ruling in these terms:
'it is … injurious to the administration of justice that the circumstances of a criminal case, on which the exercise of the Prerogative of mercy depends, should be made the subject of discussion or of Questions in this House.'
That is the end of the contained quotation. My predecessor's Ruling then goes on:
The House would, in such case, be claiming to be a court of appeal from the sentences pronounced by the courts, if it allowed itself to discuss and decide on the circumstances of these cases."—[OFFICIAL REPORT, 10th March, 1947; Vol. 434, c. 959.]
In view of that Ruling and contemplating the only purpose of the inquiry for which the hon. Member's Question asks, I am forced to the conclusion, however reluctantly, that I am bound to rule his Question out of order on the Rulings of my predecessors. It may be that the House one day would want to alter its practice, but that I could not do myself.

Mr. Silverman: I am very grateful for the careful answer which you have given, Mr. Speaker, but may I submit that all the precedents to which you have referred relate expressly to the exercise of the Prerogative of mercy. You, Sir, have said that this Question was inextricably related to the exercise of the Prerogative of mercy, but, with great respect, I submit that that is not so. There can be an inquiry to see if there has been a miscarriage of justice whether or not the sentence is carried out. Unfortunately, in some cases there has to be and there has been an inquiry after a sentence has been carried out to see whether the sentence ought ever to have

been carried out. This is inevitable and cannot be helped. The two questions are quite distinct.
If the Ruling which you have given, Sir, is correct, it means that every Member of this House in every future case will be prevented from putting down any Question to any Home Secretary even if he is armed with the most overwhelming new evidence which was not available at the trial and not before the Court of Criminal Appeal and which establishes beyond any reasonable doubt the wrong-ness of the conviction. I am not saying that that is this case—I do not know—but what I am saying is that, if we cannot ask for an inquiry before execution because the question of reprieve might be involved, it means that alone among the citizens of this country Members of the House of Commons are prohibited from bringing to the notice of the Home Secretary and of the House of Commons matters with which we are all concerned and for which we are all individually responsible. I suggest with very great respect that an extension of the rule to that extent would be contrary to the practice of the House and to our duties as Members, and a great mischief against public policy and the administration of justice. Our business is not to prevent ourselves from ensuring that injustice is not done. Our business is to take such powers as we reasonably can to make certain that justice which is done in our name is real justice.

Mr. Speaker: It is because of the very considerations which the hon. Member was mentioning that I think that this is an important point and I have accordingly considered it with the greatest possible care. It would be in no sense unwelcome to me if the House chose to take the opportunity some time to consider whether my interpretation of the existing practice is right and whether this Ruling is right. However, I am afraid that I have considered the matter very carefully, and I do not think that further representations would cause me to change my mind about it.

Mr. Hale: May I call your attention, Mr. Speaker, to three things which have occurred since the Ruling of Mr. Speaker Clifton Brown which are relevant to the case of my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman).
First, such an inquiry was appointed in the case of Rowland in 1949. The appointment was made by the Home Office as a Home Office appointment and not in the name of the Crown, except in the sense that every Minister acts in the name of the Crown. The Home Secretary acted departmemtally and not even quasi judicially. He acts administratively in the appointment of someone who will thenceforward act quasi judicially, but the appointment of a committee is a Departmental and administrative matter.
Secondly, that appointment was made by the Home Secretary virtually at the express invitation of the Court of Criminal Appeal who, in rejecting Rowland's appeal and his desire to call further evidence, called express attention in as clear words as their Lordships could use in view of the well-established rule that their Lordships would not give instructions to the House or to the Minister to the fact that there were matters for which there was another form of inquiry which remained available. They used words almost precisely to that effect.
Hon. Members will recall that a second such inquiry was made. I only refer to it by saying that again the Home Office ordered the inquiry after Questions in the House.

Mr. Silverman: After a debate.

Mr. Hale: I admit that, having come here at short notice, I have to rely on my memory, but my clear recollection is that in Christie's case Questions were asked. A debate certainly followed—that is another matter—but Questions were asked and the Home Office certainly ordered an inquiry at which Christie gave evidence while he lay under sentence of death and at a time when he had been warned that that sentence would be carried out.
Thirdly, since then we have passed the Homicide Act. We therefore have two classes of sentence. Surely it will not be argued that we can ask a Question about a man convicted of murder and ask for an inquiry but cannot ask for an inquiry in a case of capital murder. If that is argued, then we have two classes of offender in a murder case, in one of which a Question can be asked but not in the other.
Fourthly, may I humbly submit with great respect that Erskine May is neither a Solon nor a Hammurabi, and that, when the House accorded to one of its servants its gracious permission to write a most useful commentary on its rules and procedure, it did not entrust him with the task of formulating a new constitution. This is a matter of asking a Question of one of the Ministers of the Crown about the performance of a duty for which he is clearly responsible to the House. Had he not been responsible to the House the debate on the Report in the Evans case could never have been held.

Mr. Speaker: Personally, I should welcome it in every possible way if the House sought in proper time to challenge this my Ruling so that we might know the precise definition of the practice of the House about Questions pending the execution of a capital sentence. All these considerations do not, however, cause me to change my view about what the rule of the House is. Believing it to be such as that on which I have acted, I am bound to rule as I have done. Of course, no considerations of this kind arise later. They arise simply in the period pending execution of the sentence.

Mr. E. Fletcher: This is, obviously, an important matter. In view of your Ruling, Mr. Speaker, I wonder whether you would enlighten the House further by telling us to what extent your Ruling goes. Yesterday, not knowing anything about the Question which my hon. Friend had put down, I handed in to the Table a Question in the following terms:
To ask the Home Secretary if he is aware of the increasing concern felt by the public about convictions in criminal cases, particularly murder trials, where convictions result from confessions made by an accused while in police custody without any adequate corroborative evidence of guilt, and whether he will review the existing procedure obtaining in such cases.
I naturally expected that that Question, which had no reference, direct or indirect, to the Prerogative of mercy, would appear on today's Order Paper. I was surprised to find that it did not appear. I understand that the reason why it did not appear was in some way connected with my hon. Friend's Question. I fail to understand in what way, but it seems to me that I should make


this public. In view of the Ruling which you have given, Mr. Speaker, I should be glad if you would now inform me whether my Question will appear on Thursday's Order Paper.

Mr. Speaker: I do not know. I have already told the hon. Member in private circumstances, which can now become public, that I hold that Question to be in order and I know no reason why it should not in the ordinary course proceed in that way.

Mr. M. Foot: You have made it clear, Mr. Speaker, in your reply to my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), that if the House saw its way to alter the arrangements as you understand them now to exist, you would be very much in favour of that happening, or, at least, you would find that agreeable. This is an urgent matter. Could not the Leader of the House, who is not present, be informed by one of his hon. Friends of what you have said in this matter and of how you think—[Interruption.] Mr. Speaker can deny this if I am wrong. He has given a clear indication that if it were possible for the procedure to be altered, at least he might think that there would be good reason for doing so. Therefore, as the matter is so urgent, could not a message be sent to the Leader of the House that he should make a statement either today or tomorrow so that this Question should be allowed to be put before the action is taken which might take place tomorrow?
From what I can see from your Ruling, Mr. Speaker, it leads to the most extraordinary situation that whereas it is perfectly in order for an hon. Member to put down a Question asking for an inquiry into a possible miscarriage of justice in which there is no question of capital murder, apparently it is ruled out of order if there is a question of capital murder. Surely, that is a ludicrous state of affairs. It would be a scandalous state of affairs if the procedure went on tomorrow. Therefore, is it not the duty of the Leader of the House to take note of what has been said by Mr. Speaker and to try to take immediate action, so that my hon. Friend's Question can be put and answered in the House of Commons?

Mr. Speaker: I should say two things and then, perhaps, we can proceed. I did not mean to express any personal view, favourable or unfavourable, to a change. I simply wished to make clear that if someone wished at the proper time and place to challenge my Ruling, that could contain no element of regret on my part. I do not mind having my Ruling challenged. That was all I meant about that.
In reply to the point raised by the hon. Member for Ebbw Vale (Mr. M. Foot), it has long been so in our practice that the cases involving a capital sentence are in this regard wholly exceptional.

Mr. Silverman: I know that you will not take it as any disrespect to yourself or to your Ruling, Mr. Speaker, if I say that on this extremely difficult and new point, I am not at the moment content to accept it. I recognise that there is only one way in which it can be challenged, and I propose to take that way.

Mr. Speaker: I hope I have made it plain that I regard that as a most proper way of dealing with the matter.

BALLOT FOR NOTICES OF MOTIONS

Board of Trade (Export Services)

Mr. C. Osborne: I beg to give notice that on Wednesday, 22nd February, I shall call attention to the export services of the Board of Trade, and move a Resolution.

National Parks

Mr. Hayman: I beg to give notice that on Wednesday, 22nd February, I shall call attention to the need for the effective care of national parks, and move a Resolution.

Disabled Persons (Motor Cars)

Mr. A. Roberts: I beg to give notice that on Wednesday, 22nd February, I shall call attention to the desirability of extending to disabled persons insured under the Industrial Injuries Act the same facilities for the supply of motor cars as are provided for persons disabled in war, and move a Resolution.

Orders of the Day — ECONOMIC SITUATION

Order read for resuming adjourned debate on Amendment to Question [6th February]:

That this House, expressing its deep concern at the present grave balance of payments position facing the country, regrets the Government's failure to secure an adequate expansion of exports and a steadily expanding production, and calls upon Her Majesty's Government to institute policies designed to strengthen our economic position at home and abroad, and to secure social justice and a greater responsiveness by industry to the needs of the nation.—[Mr. Jay.]

Which Amendment was, to leave out from "House" to the end of the Question and to add instead thereof:
noting the improvement in the economic situation of the country since October 1951 and the present high levels of employment, investment and consumption and recognising that in order to meet our commitments at home and abroad, further expansion, particularly in exports, is necessary, supports Her Majesty's Government in their determination to strengthen the country's economic and financial position."—[Mr. Selwyn Lloyd.]

Question again proposed, That the words proposed to be left out stand part of the Question.

3.59 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Barber): Yesterday afternoon, my right hon. and learned Friend the Chancellor of the Exchequer ranged widely over the various aspects of our economic and financial position. I should like, at any rate at the outset, to consider a somewhat narrower field.
The right hon. Member for Battersea, North (Mr. Jay), the hon. Member for Grimsby (Mr. Crosland) and several other hon. Members referred to our disappointing rate of economic growth and suggested that the Government were complacent. That, of course, is the most utter nonsense. I am not surprised that hon. and right hon. Gentlemen opposite make this spurious criticism. It is just what one would expect from an Opposition which is itself divided on the most fundamental principles of economic and industrial organisation. Do hon. and right hon. Members opposite really think it was complacency that caused my right hon. Friend and his predecessor to take the action they have taken over the last

year or two? To have listened to some Opposition speakers yesterday, one would have thought they were quite unaware of the immense responsibilities which this country has to bear and that all that was necessary was to have some airy-fairy paper plan which would get us out of all our difficulties.
As the right hon. Member for Batter-sea, North knows well, forward planning, in the view of the Government, has its place, and, indeed, my right hon. and learned Friend repeated yesterday that it should be well within our power over the next five years to sustain an increase in the gross national product of 3 per cent. a year provided we increase our exports at double that rate. It will not do to proceed on the basis that all one has to do is to produce out of a hat an over-all paper plan or target.
Yesterday evening, my hon. Friend the Member for Preston, South (Mr. Green), in a most penetrating speech, referred to the fact that the Opposition Motion contained a demand lor six priorities. He pointed out that that meant no priority at all. The Government Amendment is, I am happy to say, a little more specific. It is recognised that further expansion, particularly expansion in exports, is necessary if we are to meet our commitments at home and abroad. So the House can start from the assumption that the Government have no illussions either about our present economic situation or about the progress which is necessary in the future.
Having said that, it is no earthly use hon. Members opposite merely stating the fact that the rate of increase of industrial production in this country has not been as great as in some others. In the first place, one cannot usefully consider the rate of growth in isolation.
The right hon. Member for Battersea, North said yesterday afternoon that
… we ought to make steady expansion our first economic aim … "[OFFICIAL REPORT, 6th February, 1961; Vol. 634, c. 42.]
The right hon. Gentleman appears to endorse that this afternoon. Of course, a rapid rate of economic growth should be one of the primary aims of the Government, but it is not the only one. Full employment, price stability, adequate defence, aid to the less developed countries and other factors are of great


importance. They all have a bearing on economic growth. I do not suppose any hon. Member would be prepared to sacrifice these other objects of economic policy. It simply is no use considering the question of growth vitally important as it is, without taking into account these other matters.
Secondly, some hon. Members opposite have made a great deal of capital out of what I might call the "league table" approach to economics. [HON. MEMBERS: "Hear, hear."] "Hear hear" they say, but what do they do? First of all they take the indices of production of a number of countries, range them in a list, and then conclude that those higher up in the list have, as it were, done better than those further down—that they have run their economies better. This is precisely what has been said.
I am not for one moment saying that we cannot learn both from the policies and from the experience of those countries whose rate of growth has been higher than our own. Of course, we can. However, the over-simplified approach to the production league tables can be very misleading indeed. In the first place, in some countries, such as the United Kingdom, the industrial sector is very large and in others it is very small. Obviously, it is easier to double something which is small than it is to double something which is large.
Again, the choice of starting point is very important. The economy of a newly independent country in Africa or that of a country which has been devastated by war will obviously grow faster than our own economy. [HON. MEMBERS: "Western Germany?"] I am coming to Western Germany in a moment. Some people seem to assume that the rate of increase in industrial production and the rate of improvement in the standard of living are almost synonymous. But even in the United Kingdom, where the industrial sector is very large, manufactures account for less than half our national output and agriculture for only about 4 per cent. Because we are a highly advanced country, the service activities—teaching, distribution, transport, and so on—represent nearly half our output. Yet these activities, which profoundly affect the standard of living of our people, do

not appear in the index of industrial production at all.
If we are to learn anything from the experience of other countries, the first thing is to get the facts straight and to put them into proper perspective. The hon. Member for Orkney and Shetland (Mr. Grimond) rightly referred yesterday to the dangers of selected statistics. I was disappointed that he got his own facts wrong. It is a fact that in recent years our rate of economic growth has been slow compared with that of some other countries, such as France and Germany, which were specifically referred to by the right hon. Gentleman the Member for Battersea, North. An equally important fact is that there are several very significant differences between the United Kingdom and these other countries. The first, and a very important one, is the growth of the labour supply. I think these figures are worth noting.
Between 1950 and 1959, our labour force rose by about 5 per cent. In West Germany, the labour force at work was up by no less than 25 per cent. That is a rate of increase five times as great as ours. That was a terrific rise, and it would have been astonishing if their rate of growth had not exceeded ours. That increase in the labour force—up by a quarter—was, as hon. Members know, because there was a great influx or refugees. It is important to note that a high proportion of these refugees were of working age. Another very important fact is that, quite apart from the size of the increase, these refugee workers were more mobile than a resident population suoh as ours and, consequently, could be settled where they were needed. That helped to bring about a swift growth of German output per head.

Mr. Douglas Jay: Is the Economic Secretary not aware that if he takes the figures of output pec worker employed which were given in the P.E.P. report, that also shows a much faster rate of advance in Germany and France, so it cannot be wholly due to the extra supply of labour?

Mr. Barber: I am not saying for one moment that it is wholly due to these factors. [HON. MEMBERS: "Oh."] H hon. Members opposite want to jeer, I can only tell them that if they are interested in achieving a greater rate of


growth in this country, they might consider the facts. Germany has been able to draw on a big pool of unemployed. We have not been able to do so because, thank goodness, we have had full employment since the end of the war.

Mr. William Ross: Really.

Mr. Barber: Also, there has been a very big movement from the land in Germany to occupations which give a higher output to those employed in them. With 4 million people still employed on the land in Germany, this movement can be expected to continue. In Britain, we have on the land and in the fishing industry less than one million. In France, between 1950 and 1959, the population grew twice as fast as in the United Kingdom, and in the United States, over the same period, it grew four times as fast as here. Obviously, this factor is bound to have a very important effect on the rate of growth.
Looking to the future of this country, it is unlikely that our working population will show any significant increase over the next five to ten years. Again, this is bound to have an effect on our rate of growth compared with that of countries with rising populations.

Mr. Gerald Nabarro: The Chancellor of the Exchequer has recently appointed Professor Cairncross as economic adviser at the Treasury. Does my hon. Friend not recall that Professor Cairncross a number of years ago submitted a minority Report to the Phillips Committee in which he recommended strongly that the earnings rule for men between 65 and 70 years of age should be totally abolished? Would not that provide the Chancellor and the President of the Board of Trade with a reservoir of additional labour which we urgently need in many areas of the country and will not the Chancellor now listen to those wise words of Professor Cairncross, always strongly supported by myself?

Mr. Barber: I am sure that my right hon. and learned Friend will listen to the words of Professor Cairncross and also the very wise words of my hon. Friend the Member for Kidderminster (Mr. Nabarro). The fact is that if in this country we want to grow faster, there is

no doubt that it will depend to a very great extent on productivity, and I shall come to that later.
But I said earlier that the starting-point of any comparisons was important, and I think that this is particularly obvious in the case of France. It is a remarkable fact that industrial production in France in 1950 was scarcely higher than it was in 1929—twenty-one years earlier. France started from real stagnation, and not the sort of imaginary stagnation which appeals to hon. Members opposite. In the last ten years, the technology of French industry has caught up a whole generation, going straight from the 1920s to the 1950s. In these circumstances, it would, indeed, have been very surprising if the French had not realised a very big increase in output. And it is not without significance that France has devalued her currency twice in the last ten years.
I said earlier—and I am sure that the whole House will agree with me—that you cannot consider economic growth in the United Kingdom in isolation from the other objectives of our economic policy. One of these objectives is the strength of sterling. It is perfectly true that at times it has appeared as though the action necessary to encourage expansion of production has been frustrated because of action necessary to maintain the strength of sterling, but the facts are that more than a third of the world's trade is conducted in sterling and it is one of the two main currencies in the free world. For the United Kingdom, the rô le of sterling has undoubtedly—and I certainly admit it—imposed considerable restrictions on our actions, because one of the most damaging aspects of the last war was the growth of the United Kingdom's external liabilities in relation to the size of the reserves.

Mr. A. Woodburn: Assuming the hon. Gentleman's premises to be correct, is there any reason Why activity all over the country and in every sphere of industry should be damped down when over-activity is only in one or two parts of the country and not in all industries, and when other parts of the economy could be stimulated without affecting the export problem at all?

Mr. Barber: In view of the fact that my right hon. Friend the President of the Board of Trade is to reply to the debate, I do not want to get involved at this stage in a discussion of local unemployment. I would only say that it is in general not possible to differentiate between one part of the country and another when one is dealing with monetary and fiscal measures. For example, I think that the right hon. Member for Battersea, North would agree that it is not possible to have different Bank rates, one for abroad and one for home and so on. But I would prefer not to go into the very big question of local unemployment now.
There is no doubt that one consequence of the rô le of sterling has been that we have had to regulate our economy in such a way as to be able to respond quickly to changes in the climate of opinion in trade and production abroad. In one sense, this has been a handicap, as I think the hon. Member for Grimsby recognised yesterday It is easy to say, and indeed some have said, that we would be better rid of this obligation. We would then have one consideration less to take into account when furthering our own plans for an expanding economy. The fact is, however, that successive Governments have always held that freedom of access and ease of transactions are of the greatest possible importance to a country in our position with commercial interests all over the world.
Moreover, sterling is the reserve currency of a whole range of newly-independent countries in Africa and Asia—Nigeria, Ghana, Pakistan, India, Ceylon, Burma, and Malaya—and it is hard to imagine anything that could damage them more quickly than a failure by us to maintain the strength of sterling. Failure here would undo overnight the patient work of years in helping these countries to get ahead with the development on which they place such great hopes.
The right hon. Member for Battersea, North and several other hon. Members referred yesterday to the need to make further use of the machinery and resources of the International Monetary Fund. I think that this is a very important point. The House knows—and I will not go into it in detail—that is has always been the policy of Her Majesty's

Government to work with the other members of the International Monetary Fund with the object of strengthening the Fund and enhancing its rô le in world economic affairs.
The size of the Fund's resources was increased by 50 per cent. in 1959. As my right hon. and learned Friend said yesterday, we have maintained the view that the use of the Fund's resources is to be regarded as a normal international financial operation, not a crisis measure, so that members should seek the assistance of the Fund at an early stage when they need short-term finance.

Mr. Harold Wilson: The hon. Member is telling the House what it knows already. On 26th November, we put two clear proposals to the hon. Gentleman and the previous Chancellor about the International Monetary Fund, one to alter the proportion under which successive tranches could be borrowed from the Fund and secondly to give the Fund specific credit-creating powers, which has been strongly endorsed by Lord Monckton. The hon. Gentleman has had fourteen months to consider that. Have any proposals been put by Her Majesty's Government, have they been turned down, or are they still being considered? Have they been forgotten Or do the Government not understand them?

Mr. Barber: We do not understand some of the things that the right hon. Gentleman says but we understood that. When my right hon. and learned Friend was in Washington last September for the annual meeting of the International Monetary Fund various suggestions were made by various people. It is not for me to disclose the details of what was said, but various proposals were put forward for doing what I believe is the right hon. Gentleman's objective as well as our own—that is for making the International Monetary Fund more effective.
I am sorry to have repeated something which is already known to the House but that is the only way in which I can explain my point on this subject. As the right hon. Gentleman knows, various senior officials from the Treasury are going to Washington shortly and they will be having discussions on the International Monetary Fund. I do not think that it would be helpful if at this stage I were to deal off the cuff with specific suggestions of that kind.

Mr. H. Wilson: The hon. Gentleman has had fourteen months to read what he wrote on his cuff on the previous occasion. Will he say, at any rate, whether the Government had specifically turned the proposal down before the last I.M.F, meeting? If he cannot, can he say what will be raised in this new knight's move to Washington? What specific consideration will be given to the proposal before Sir Frank Lee and his colleagues leave for Washington?

Mr. Barber: In view of the right hon. Gentleman's request, I am sure that my right hon. and learned Friend will look again at the proposal which the right hon. Gentleman made. One important point in that connection is that we are only one member among about 60 countries in the Fund and consequently we must proceed in consultation with other members.

Sir Henry d'Avigdor-Goldsmid: Will not my hon. Friend agree that President Kennedy's statement yesterday supported this idea and that this brings an entirely new aspect of the matter and, therefore, no reproach of delay can properly be levelled at Her Majesty's Government?

Mr. Barber: I am very pleased that my hon. Friend has made that point. If I had not been interrupted by the right hon. Member for Huyton (Mr. H. Wilson), I was going to say that we certainly welcome the further references made by President Kennedy concerning the rô le of the International Monetary Fund, particularly his statement yesterday and the emphasis he laid on the need to strengthen the Fund and increase its effectiveness in providing flexibility to support an expanding world economy. After all—and I am sure that even Members opposite will agree with this—that has always been the policy of Her Majesty's Government.

Mr. Jay: In order to help the hon. Gentleman, may I ask this question; if President Kennedy can tell us publicly and precisely what he is proposing to the International Monetary Fund, why cannot the British Government do the same thing?

Mr. Barber: If the right hon. Gentleman had listened to what I said just now, he would have heard me refer to what

President Kennedy had said and add that this had always been Her Majesty's Government's policy. I really do not see that I can go very much further.
Earlier, I referred to the special circumstances of some other countries and to the special circumstances of our own. I have not done that by way of excuse, nor because we are complacent or satisfied, but because it is impossible to make any useful comparison unless those special factors are taken into account. If our economy is to grow, then there are two prerequisites: increased productivity and increased exports.
The House knows the views of my right hon. and learned Friend the Chancellor about exports. I will only add that in a country where there is, over the next few years, little prospect of any significant increase in population we shall not increase our exports sufficiently unless we are able to do two things, and unless we are prepared to do them. The first is to ensure that home demand is not so great that it provides a disincentive to export, and the second is to increase our productivity.
The first of these two factors must involve action by the Government to keep the economy in balance. The Opposition Motion complains that we have not experienced steadily expanding production. But one thing is absolutely certain: if we had not taken the action that we did take, we would certainly have experienced a succession of booms and slumps which would have made the actual fluctuations in demand seem like chicken feed.
Of course, it would be easy to pander to immediate popularity and let the economy rip. [HON. MEMBERS: "That is what the Government did."]—Hon. Members say that is what we did. They were certainly not opposed at that time to the action that we took. They might at least have mentioned their opposition then.
The fact is that economic growth cannot be achieved merely by turning on a tap. All the experience of the 1950s shows beyond doubt that the easiest weapon at the Government's command, the increase of demand, is not enough by itself. Excess demand carries great dangers with it, not only for the balance of payments, but also by rapidly overloading our resources at home. I should


like to quote a few lines from this month's issue of The Banker. [Interruption.] I shall be interested to know whether Members opposite agree with this. The article is headed "Policy for Growth". There is no author's name attached to it.

An Hon. Member: Was it the right hon. Member for Battersea, North (Mr. Jay)?

Mr. Barber: I do not think so. The article says:
While a deficiency of total demand is likely to reduce output without, in the short run at least, reducing prices or costs, an excess of demand will merely drive up prices and costs without increasing output—indeed the shortages, wastages and blunted incentives associated with excess demand must hinder production and distort its pattern.
I believe that to be absolutely right. If we are to achieve a satisfactory rate of economic growth and at the same time safeguard our balance of payments, the Government must be prepared to act, according to the circumstances, either to encourage demand or to restrain it. That is precisely what we have done.
I said a few minutes ago that the second condition for an increase in exports was increased productivity. There can be no doubt that one of the most encouraging factors in this connection has been the very large increase in investment. Since 1951, investment, as a proportion of the gross national product, has increased from 14·9 per cent. to about 17½ per cent. in 1959.
The hon. Member for Grimsby asked whether we should not aim to push it up to 20 per cent. He will be pleased to know that we expect that the figure for last year will turn out to be probably about 19 per cent. The upward movement in one of the most important sectors for growth—manufacturing industry—is very considerable. The forecasts collected by the Board of Trade recently show that in 1961 the level of investment expected by manufacturers will be 30 per cent. higher than it was in 1960. This itself is an increase over their earlier forecasts and compares with an increase of 24 per cent. between 1959 and 1960. That is hardly stagnation.
The hon. Member for Grimsby asked whether we wanted still higher investment. We certainly do, and our actions

have shown this. At the time of the last Budget, which resulted in a net increase in taxation, initial and investment allowances were maintained in full. But I might mention that the general treatment of investment through initial and investment allowances compares favourably with that of any other advanced industrial nation.
This increase in investment, at a time when the growth of the labour force is slowing down, means that there will be more capital equipment per worker. In real terms, capital available per worker in 1959 was already about one-third higher than in 1951. One of the points made by the Wider Share Ownership Committee in its pamphlet published yesterday is the significance of investment in enabling us to make the most effective use of labour. That was no doubt one of the points which my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) had in mind in putting forward his proposal yesterday.
I believe that we are now at the beginning of a decade in which technical resources will be available to economise in labour on an unprecedented scale. We are at the forefront of the world in our development of electronic techniques for controlling production and distribution. We are exporting equipment to countries overseas, but, strangely enough, we are sometimes slower than some of our competitors in adopting for our own use the equipment which we ourselves manufacture.
I was told the other day, for instance, that the fork-lift truck was invented in this country and put on sale in 1922. Yet it took nearly a quarter of a century before we really started to exploit its potentialities—and then only after it had been exploited on the other side of the Atlantic. Maximum productivity, however, will not come from investment alone. We all know of cases where companies are being held back by inefficient and outdated management. We all know of cases where the use of the most up-to-date equipment and techniques is being frustrated by restrictive practices.
I must say that when Members opposite were charging the Government with complacency in speech after speech yesterday, I was a little surprised that there was no reference whatever to these restrictive practices. Of course those


cases constitute only a minority, but unless both employers and employees in those companies are to learn the hard way, a lot of heart-searching is necessary.

Mr. George Darling: Can the hon. Gentleman give any examples of cases when trade unions have refused to introduce new methods and ideas when the management has come along with sensible proposals on wages, severance pay and the other things for which the unions are entitled to ask? Is he aware that in the coal mining industry, where that has been done by the management, there has been a greater increase in productivity than in any other section of the community?

Mr. Barber: If the hon. Member for Sheffield, Hillsborough (Mr. Darling) thinks that there are not restrictive practices which should go, all I can say is that his views are at variance with those of the overwhelming majority of people, including the majority of those who work in the factories and on the floors of the workshops.
I join in the congratulations which have been given to my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot). He rightly said in his maiden speech yesterday that human relations in industry were of the utmost importance. One hon. Member who congratulated my hon. and gallant Friend said that he looked forward to hearing my hon. and gallant Friend speaking on other subjects. I do not dissent from that, but I hope that we shall hear more from him about the human element in industry which, I think, is at the root of many of our troubles.
Good management, the sweeping away of restrictive practices, aggressive selling, the utilisation of investment to the full—all these have a part to play. The fact is that the rate of economic expansion is not something which depends solely on the Government. Even to the extent that the Government are responsible, economic growth is inseparably bound up with the other great issues of economic policy—balance of payments, wages, exports, productivity, prices, the level of investment, and so on.
Total Government responsibility for those would mean introducing a whole apparatus of controls. We do not want that and we do not believe that the country wants it. But if the Government do not direct labour, control imports, reintroduce licensing and all the rest of it, much of the responsibility for economic growth lies elsewhere. That is one of those elementary truths which is so platitudinous that there is a danger of its being forgotten. Some of the most important decisions do lie with the Government, but, added up, thousands of decisions made in board rooms, trade union branches, workshop floors and elsewhere are just as important.
All that applies not only to the two sides of private industry, but also in the public sphere, right down the line through local authorities, regional hospital boards, electricity boards and so on. Of course, the Government have a big rô le to play, both by virtue of their own operations as a large spender and their control over other spending bodies, and by virtue of their duties to maintain employment and to foster expansion. But the objective of economic expansion is not a matter only for the Government.
What, then, are the most important decisions? First and foremost, it is clear that the things which we need to do to keep a high standard of living, to raise exports and improve investment and raise productivity are also the things which would raise our place in the "league table". Economic growth is not something which can, as it were, be cut off from all the other bits of economic policy and dealt with alone.
In our present position, the achievement of a sustained growth must come through exports. If we are to grow steadily, we must be secure on the external front and exports must lead the way. We do not need to increase exports because we are in a crisis, as some have suggested. We need to do so firstly because our economy is such that rising prosperity inevitably brings with it bigger bills for imports; and, secondly, because we have voluntarily accepted heavy commitments on other expenditure overseas.
We want to play our part, alongside our American and other allies, in defending freedom, but that costs money. We accept in full our need to help the newly


independent and less developed countries
with grants and loans. That is a numanitarian need and it is good for world trade, but it mosts money. We nave a load of post-war debt which we are paying with interest, as we promised to do, and that, too, costs money. Recently, receipts from exports and from our other current income which we have coming in from abroad have not been large enough to meet our rising expenditure.
Finally, to listen to the speeches of some hon. Members opposite one would think that we were about to return to the Dark Ages, or, if I may put it in a way a little more familiar to them, to return to the conditions of 1951. I must say that when one thinks of the plight of the pensioners ten years ago, one is a little surprised that whoever drafted the Opposition Motion should have had the nerve to include the words "social justice".
What is the truth about this charge of stagnation? We are carrying a considerable but essential defence burden. We are providing our share of aid to the under-developed countries. In fact. Government aid to the under-developed countries has doubled in the last three years. Despite that, the standard of living of the British people has gone up by 30 per cent. in the last ten years. Investment in industry is running at an all-time high level. For two and a half years we have maintained price stability and we still have full employment.
What are the alternatives advocated by the Opposition? Of course they vary a little from faction to faction and day to day, but the chairman of the Labour Party, the hon. Member for Coventry, East (Mr. Crossman) has no doubt—presumably he is not chairman for nothing. He maintains that the only hope for Britain lies in complete Socialist planning and nationalisation. It is, I think, just as well for the country that we believe otherwise.

4.36 p.m.

Mr. Frederick Lee: The Opposition asked for this economic debate because throughout the country there is grave apprehension about the state of the economy following the disastrous year of 1960. We were ex-peoting and the nation was expecting

that in the course of these two days we would hear from the Treasury Bench about new ideas to redress the balance of our trade during the last year. [HON. MEMBERS: "Give us some new ideas."] We are not the Government. Hon. Members opposite are so used to the idea that we must lead all the time. We have now heard two Front Bench speeches from the Government, and I challenge contradiction when I say that not a single new idea has been uttered by the Government about redressing the balance about which we are so disturbed.
The Economic Secretary told us that in comparing the performance of some other counties with our own, we were not making a fair comparison. He went on to say that it was unfair because there had been a large increase in the labour force of Germany and other countries. My right hon. Friend the Member for Battersea, North (Mr. Jay) answered that when, discussing a P.E.P. Report, he said:
Another table in the P.E.P. report which is very illuminating shows the output per man hour in the O.E.E.C. countries between 1953 and 1957. Again it shows the United Kingdom last in the race with a 10 per cent. rise over those four years. In France, 32 per cent., Germany, 29 per cent., Italy, 26 per cent."—[OFFICIAL REPORT, 10th November, 1960; Vol. 629, c. 1230.]
In other words, the alibi of a big increase in the labour force is completely discounted because we are arguing about output per man-hour, so that the argument of the Economic Secretary, which is based on an increase in manpower, is completely invalidated.

Mr. Barber: Will the hon. Gentleman say whether he thinks the starting points for these comparisons are comparable? Is it not the fact that a country which has been devastated by war can make a larger increase in production per man-hour?

Mr. Lee: I should be extremely interested to hear the hon. Gentleman's views on the advantages of being devastated by war. I thought that we were very grateful we had avoided much of the devastation which those countries suffered. I agree that it is an advantage when one starts with entirely new plant, equipment and so on. One can take equations from 1938, quite apart from the war period to show that we still do not come out with any advantage on that equation.

Mr. William Shepherd: The hon. Gentleman is implying that there is a higher national product in Germany than here. Surely it is the fact that, with a slightly smaller population, we have a higher gross national product?

Mr. Lee: I did not use the words attributed to me by the hon. Gentleman. I was talking about output per man-hour.
When we are discussing the question of an increased labour force, we have to look also at what we are doing about our labour force. The hon. Gentleman hardly touched on that except to say that, thank heaven, our labour force is being reduced a little so that the men who remain will have more capital equipment per man. This is a new policy of how to cure our economic problems.
The hon. Gentleman's speech was all the more disappointing because of the disappointment we had yesterday over the Chancellor's speech.

Mr. Nabarro: I did not find it disappointing.

Mr. Lee: The hon. Member for Kidderminster (Mr. Nabarro) is, of course, utterly opposed to his own Government on everything, even on questions of principle, and I understand his point.
We were hoping to hear both from the Chancellor of the Exchequer and from the Economic Secretary about new policies and new thinking to meet the dangers which face us. After listening to the Chancellor's speech yesterday, I went to the Library to read these words:
I speak today in an hour of national peril and national opportunity. Before my term has ended, we shall have to test anew whether a nation organised and governed such as ours can endure. The answers are by no means clear. All of us together—this Administration, this Congress, this nation—must forge the answers.
I wonder why we could not have had that kind of message from the Front Bench opposite. Is it suggested that the American economy is not as strong as ours; that the words of President Kennedy would have been inappropriate to the conditions of this nation? If the Chancellor believes—

Mr. Nabarro: We are Limeys, not Yanks.

Mr. Lee: If the moustachio there will be quiet for a little he will have his chance later on.
If the Chancellor believes that our economy is stronger than that of the United States, I suggest that he is pretty well alone in that belief. After counselling us about the advisability of choosing between the Scylla of complacency and the Charybdis of despondency, it sounded as though he bumped pretty hard into the one and bounced and got stuck on the other.

Mr. Frederic Harris: An uncomfortable ride.

Mr. Lee: So it would appear.
After the night hon. Gentleman had answered all the points which my right hon. Friend did not make and ignored most of those which he did, he said:
The United States and United Kingdom's short-term liabilities have been increasing. If this imbalance is fundamental—in other words, if it is not just a temporary affair—it must be corrected one way or another."—([OFFICIAL REPORT, 6th February, 1961; Vol. 634, c. 53.]
What a blinding flash of the obvious! What we were hoping to hear was which method was to be deployed. As yet we have not heard any new methods advocated from the Front Bench opposite.
When the right hon. Gentleman the Chancellor of the Exchequer defends the health cuts tomorrow, perhaps he will think of another point in President Kennedy's speech, when he said:
Medical research has achieved many wonders, but these wonders are too often beyond the reach of too many people owing to a lack of income (particularly among the aged), a lack of hospital beds, a lack of nursing homes, and a lack of doctors and dentists. Measures to provide health care for the aged under social security and to increase the supply of such facilities and personnel must be undertaken this year.
That, again, is the message of an imaginative man who knows how to ensure health in his own community and how to get a better feeding among working people, in contrast to what we heard from the Minister of Health the other day on this point.
Later, in his points for action, President Kennedy asked for more commitment to long-term development, and orderly planning for national and regional development instead of a piecemeal approach. I suppose that would be what the Economic Secretary would describe as airy-fairy planning.
In the course of his speech, the Chancellor rejected long-term planning in favour of cutting a certain amount of red


tape which hampers exports. If theGovernment had been at all serious about exports, after ten years there would hardly have been any red tape left to cut. Indeed, I agreed very much with what my hon. Friend the Member for Grimsby (Mr. Crosland) said when he suggested that we must now co-ordinate investment in the private sector with that in the public sector to achieve a given target over a number of years. Surely this is not airy-fairy planning.
It is, of course, the case that many people in industry are now asking the same thing. The other day I read the speech of the chairman of Leyland Motors. He said:
We can no longer afford to plan from year to year. It is essential that we should operate on a carefully thought-out long-term policy. Once that policy has been decided, it should be adhered to and modified only in very exceptional circumstances.
Is that airy-fairy planning, or is it not the case that most enlightened employers nowadays realise that only by getting a comparatively long-term plan can they conduct their business effectively? I am not saying that they stick rigidly to such a plan, but certainly they do not consider, as the Chancellor did, that the idea of planning is something which is irrelevant to their business. Indeed, the President of the Board of Trade uttered the dirty words "long term planning" only a few days ago.
If we look at what the F.B.I. has been saying we find that it is only with people who are determined that they will not take the steps necessary to bring help to our economy that there is any dispute about the need for planning of the type for which we have been asking for many vears.

Sir Harmar Nicholls: In fairness to what the hon. Gentleman has been saying, he ought to define general planning in more detail and say what sort of plans he has in mind.

Mr. Lee: I have given one example. I have spoken in terms of a ten-year capital development programme in which we can see, by contrast between the private sector and the public sector, how we are fitting into the ten-year plan of capital development. That is one example of many.
I was going on to say that whether we think of the public sector, or the private sector, or that third sector which is allegedly private but which can only function with huge doles of public money, the business of those sectors is the nation's business, and we cannot any more afford to believe that, merely because one sector is supposed to be owned by private individuals, it is of no interest to the nation.
One of our complaints is that Government Departments have no real power in determining, say, the capital programme. The hon. Gentleman himself said that a Government Department would record what had happened. The time has arrived when Government Departments must be able to determine what happens, and not merely record events after they have occurred.
Not much has been said about unemployment in the course of this debate. It has rather been taken for granted that there is no problem of unemployment in this country. As a matter of fact, on 16th January unemployment in Great Britain—which, I take it, does not include Northern Ireland—stood at 418,900, and we know that in Northern Ireland there is a rate of unemployment of 8 per cent. That must mean that we have well over 450,000 unemployed people in the United Kingdom. We also know that there are over 120,000 workers on short time, and if we use the formula used by the Ministry of Labour, which is that two people on part-time equal one unemployed person, we arrive at a figure of well over 500,000 unemployed people in the United Kingdom. We cannot afford to be complacent about a situation in which half a million potential wealth producers are quite unable to find employment. There are more than 25,000 persons under the age of 18 in that total. I know that a number of them left school at Christmas, but the position is extremely unsatisfactory.
I suggest that in the matter of apprenticeships the position is utterly disgraceful. Two years ago the Government told us that a new scheme, based on the Carr Report, was to be inaugurated. Yesterday, I asked the Minister of Labour how many group apprenticeship schemes were set up during 1960, and in which


industries they were established. His Answer was:
I am informed that there are five such schemes. Four are for engineering apprentices, and one for commercial apprentices."—[OFFICIAL REPORT, 6th February, 1961; Vol. 634, c. 9.]
This amounts to a complete failure of the whole scheme set up by the Government two years ago.
In many of our great firms first-class job of work is done in training apprentices, and I have always paid tribute to that fact. But, in the vast majority of firms in the engineering industry and other industries which use apprentices, there is not the slightest effort to produce apprentices. The group apprenticeship scheme was brought forward to help small firms to pool their resources so as to be able to produce apprentices, but it is clear that they are prepared to help neither themselves nor the nation—a nation which now suffers because of a shortage of skilled labour. Even if we obtained orders in the great capital trades, we could not obtain the skilled labour necessary to carry them out in a short time.
The majority of firms which use skilled labour are determined not to play any part in the production of the very apprentices upon whom they will depend, and whom they will simply take over when the great firms have produced them. I would have thought the Chancellor would feel that he ought to consider this matter when he is drawing up the Budget. In such a dangerous situation there ought to be some way of penalising those who will not assist the nation in the production of skilled people.
On 6th December, we discussed the position in the car industry. The President of the Board of Trade told us:
My general conclusion is that the future of this industry can obviously be very bright. On the whole it would be brighter if it were not made a matter of party controversy and censure debates… "—rOFFiciAL REPORT, 6th December. 1960; Vol. 631, c. 1103.]
Apparently, it is not the duty of the Opposition to bring the problem of the car industry to the Floor of the House. Let us consider what has happened since then. We are now in the second month of 1961, and the position in the car industry looks much dimmer than it was in December, when the President of the

Board of Trade told us that many of the stories about the industry's difficulties had been exaggerated. Does he now feel that our very modest approach was a mistake? We were not making exaggerated statements. I wonder if he now feels that he can bask in the thought that many statements about the car industry have been exaggerated.
What of the future? Apparently, the £300 million expansion scheme is still going ahead. From replies given in another place we also know that £31 million of public money is being devoted to this expansion scheme. We have asked questions as to whether the scheme is to continue, but the only answer we have got is that the employers are quite confident. That is no answer. We are entitled to know whether the Government have made any assessment of the value of a terrific expansion of this kind in a situation in which there are not as many new efforts for greater production as there should be. We are entitled to an answer from the President of the Board of Trade tonight. We want to know the Government's assessment of the facts relating to the world automobile industry, and whether, in the light of those facts, this £300 million expansion scheme should be permitted to go ahead.
In the debate in December the right hon. Gentleman also told us that the Advisory Council for the industry looked after everything but wages. It was apparently a glorious Council, and there was not the slightest need for the Opposition to talk in terms of a working party. That was quite irrelevant because of the great powers of the Advisory Council. Apparently the Minister of Labour does not take the same view, because while the President was telling us all about the Council's virtues the Minister of Labour was setting up another high-powered committee to examine labour relations in the car industry.

The President of the Board of Trade (Mr. Reginald Maudling): I made it clear that the question of labour relations was precisely the only one, by agreement, not dealt with by the National Advisory Council.

Mr. Lee: If the right hon. Gentleman will look at what he said he will see that he explained that the Council dealt


with everything except wages—and labour relations are not wages. Labour relations stem from a thousand decisions taken in every industry. The right hon. Gentleman was trying to ride out on a pretty swift piece of work by saying that the Advisory Council would do all the things we were asking to be done in the car industry.
It is not only a matter of how much we produce; even more important is what we produce. It is not enough merely for the Government to exhort workers or managements to produce more things which are of little value, in the long-term, in the world's markets. We are failing badly in producing new industries and adapting existing industries to produce what the world will require until the end of this century.

Mr. Stanley R. McMaster: Is the hon. Member advocating some Communist system of Government, with complete control over everything which is produced?

Mr. Lee: The hon. Member and his friends will go on complaining about the 8 per cent. unemployed in Northern Ireland. It is he who will face Communism and not us. Instead of going constantly into the Lobby behind a Government which brings his country an 8 per cent. figure of unemployment, he and his friends should show a little enterprise and guts occasionally. That might lead to an improved position in Northern Ireland.
It has been said that high wages in the car industry have been instrumental in pricing us out of world markets. Indeed, some firms are asking their employees to accept lower wages. The main market into which we cannot now go is the United States market, where the normal week's pay for an automobile worker is £34 10s. 5d. Are we really being priced out of that market because of high wages in the British car industry? The excuses and bromides that we have been offered for so long conceal the basic problems, and so long as the Government can kid themselves that high wages create the real problem they will not tackle the problems of this industry.

Mr. F. A. Burden: This is a very important point. I think that one of the reasons why we are being closed out of the American market for

cars is that the Americans who originally bought English cars have looked round to replace them and have found that Italian cars have engines at the back and different blinds and so on. We have to accept that they are fashionable and work on that basis.

Mr. Lee: I am not arguing with the hon. Gentleman; there is wisdom in what he says. Often our industry has not done the necessary things to which he referred, and I agree that is one of the things that the car industry must look at.
I was saying that the argument that we are pricing ourselves out of the American market is not correct, and I gave the figures of the earnings of workers in the American industry. Yesterday, my hon. Friend the Member for Aberavon (Mr. Morris) drew attention to parts of the steel industry which are slowing down in consequence of the large imports of sheet steel about which I protested during the debate last June on Richard Thomas & Baldwin and which are now in stock because of the recession in the car industry.
What are we proposing to do about the position of the steel industry? We have not heard of any kind of action which the Government propose to take to ameliorate the unemployment and the short-time being worked in that industry. I suppose the sort of action to which we can look forward in connection with the steel industry is confined to clawing back Richard Thomas & Baldwin, which has now been sufficiently will-advised to show a record profit for 1960 to add to the £70 million it has already earned for the public. In 1960, we saw its turnover up by 18½ per cent. to £103,500,000 and profits up by 45 per cent. to £14,750,000. May we expect that instead of pursuing this kind of policy and antagonising people in the constituency of my hon. Friend the Member for Ebbw Vale (Mr. M. Foot), instead of the doctrinaire approaches and that kind of thing, they will get down to an analysis of our industrial problems and help to solve them, instead of helping the shareholders who are waiting for such plums as Richard Thomas & Baldwin?
Yesterday, my right hon. Friend mentioned the shipbuilding and machine tool industries. They are two industries which worry us very much and about


which we are not permitted to see the reports that have been made. I believe this is becoming a positive scandal. Inquiries have been made into quite a number of industries, some by D.S.I.R. with public money, and when the evidence has been given the original manuscripts have been vetted. We have heard rumours that in some cases the advice has been that public ownership is the only way of redressing the problems of the industry. But, of course, that would not do at all, and so instead of producing the original report we get an abridged report which the Government feel is suitable for the occasion.

Mr. Maudling: Has the hon. Member forgotten the Mitchell Report on the machine tool industry in which employers, operatives and independent members united in their criticism of the industry and every word of which was rightly published by the Government immediately?

Mr. Lee: Will the right hon. Gentleman say why they did not print the Melrnan Report?

Mr. Maudling: We did not print that document because the evidence given was in confidence. If people are asked to give evidence in confidence, it is not wise to print it afterwards. The Report of the Mitchell Committee was on the basis that a full report should be published, and we published a full report.

Mr. Lee: The D.S.I.R. original report was never published. The Melman Report was not published wholly. It was not evidence taken in a confidential way, but only abridged versions of the reports were published—

Mr. Maudling: Nonsense.

Mr. Lee: The right hon. Gentleman says "Nonsense", but why was not the Stedeford Report published? It is fast getting to the point where it is government by conspiracy. Reports of importance to the whole of the industry of Britain have to be abridged before the public is allowed to see them. It is the public we wish to enthuse about these things. There is nothing to be ashamed of in saying that an industry needs modernising. When this is said there will be a demand that it shall be modernised. Surely in a democracy this is the way we have always

worked, and we view with apprehension the tendency of the Government to veto the truth brought out in evidence given about great industries.
I have said that the speech of the Chancellor was a great disappointment to us, and I am sure that it will be a disappointment to industry as well. One has felt recently that there is a new tone in industry, that there is a desire now to get rid of the nineteenth century once and for all and to get smack into the second half of the twentieth century. Therefore, I am certain that not only on this side of the House but among many people who regularly support the Tory Party there will be great disappointment that we did not hear something better from the right hon. and learned Gentleman. It was only the mixture as before and it was even argued that the mixture has been a success—after the worst trade year since Korea. It seemed almost to be defying industry to expand despite the Government-imposed restrictions. Conceding that 1960 was a poor year, it suggested that it was something of an exception.
The Sunday Times is not notorious for its enthusiastic support for the Labour movement, I regret to say, but on 22nd January, I read this in that paper:
If in the 1950s Britain had been able to expand her exports at the rate at which world trade was increasing, British earnings in 1960 would have been at least £1,000 million more that they were. British reserves would have reached at least £2,000 million, the British standard of living would have risen by at least another 15 per cent. and the British contribution to the under-developed countries could be doubled. This gives some measure of the consequences of the failure of the export drive in the last decade … If Britain had matched Germany's devotion of resources to productive investments in the 1950s there would have been about another £3,000 million of productive capacity at the end of the period—equal to 60 new companies the size of Dorman Long.
Yet we had that kind of shockingly disappointing approach to this problem by the Chancellor.
There has been much concern expressed in this debate about the trend towards monopoly and I believe that from this there emerges a very great constitutional issue. Of course, it is natural that the position in the newspaper industry should be very much in the public eye. I go all the way with hon. Gentlemen on both sides of the House who have expressed their grave concern about it. But the


fact is that the economic tendencies showing in the newspaper industry which are driving it nearer to monopoly, are present in a dozen other great industries of Britain and are driving them towards monopoly in precisely the same way.
The Prime Minister told us that he had no power to interfere. His words were:
I cannot find that the Government have any effective power to do this."—[OFFICIAL REPORT, 31st January, 1961; Vol. 633, c. 783.]
By "this" he meant stop the present negotiations on the Odhams question and so on. In other words, Mr. Clore possesses far greater economic power than does the Prime Minister. If we look at the capitalist form of society in Britain which is supported by both Tories and Liberals, we find it is now eliminating the whole conception of competitive private enterprise. I have argued before that very soon the only issue for people to decide regarding industry will be as between private or public monopolies, and, indeed, in many instances the private monopoly is dependent on doles of public money. To pretend that we can divorce political democracy from economic and industrial democracy is simply a sham and a farce. The type of decision which this Government and this Parliament ought to be capable of taking is barred to us because true economic power resides outside this place and not within it. We hear much to the effect that the prestige and standing of Parliament in the estimation of the people is in decline. I should have thought that was inevitable with an instrument purporting to possess sovereign powers over the economy when, in fact, it does not possess any such powers.
We had an interesting speech yesterday from the hon. Member for Halifax (Mr. Maurice Macmillan). I hope that he has not been confined to the Tower or anything of that sort, but I do not see him in his place at the moment. He gave us, very forthrightly, an opinion—which I share—that the Tory leadership can find neither the right road nor the middle way and are merely wandering about in the highways and byways. I suppose it must have been all the more agonising to make such a profound discovery when it may cost him his pocket money and bring him to the point of wondering whether Tory Governments

have not brought him to the point at which he has "never had it so bad".
The hon. Member got on to a most profound point because he was also questioning whether the Government have the power to do the things he was asking for. I do not believe they have. When we are facing this new development in our economy, no wonder the Prime Minister cries in despair that he has no power to interfere with the creation of huge economic empires. To me he sounded very much like a Hamlet proclaiming:
The time is out of joint; O cursed spite! That ever I was born to set it right!
The hon. Member for Halifax was, I thought, very right when he said:
It is also natural that the Government should retort that their power to control events in the economic sphere is very limited; and I agree that they must not act in a way which could succeed only if their power to control events was wider than in fact it is. But that does not mean that they should refrain from taking a positive lead in the sphere where they can control events, however limited it may be. That need for leadership is all the greater because of the narrow margin on which we operate; it is likely to be all the more effective because of that narrow margin, however limited the sphere"—[OFFICIAL REPORT. 6th February, 1961; Vol. 634, c. 87.]
I believe this is very important. In the days when laissez faire doctrines were acceptable to the British people, the type of Parliamentary institution which they produced may have been all right. We have now reached a position in which the power to control the economy is a prime condition of the Government's ability to govern. Therefore, all the more reason exists why, instead of merely lamenting our lack of powers and lack of control, if we are to do anything basic about the economy we must take these powers. The hon. Member for Halifax should now follow the logic of his argument. If he believes, as I believe, that the Government do not possess the necessary powers, he should be demanding that they should take them. He quoted the cotton industry. He quoted it with approval, but the cotton industry has been reorganised at the cost to the British people of at least £30 million. The cotton industry is what one could describe as a "kept" thing. It is not, and never can be again, the sort of competitive private enterprise which is the apple of the eye of the Tory Party.

Mr. R. Gresham Cooke: Is the hon. Gentleman aware that industrial mergers are going on all the time and that a great many of them are not highlighted? Is he aware that his hon. Friends are always urging greater integration of industry and efficiency? Is he suggesting that the Government should take powers to inquire into and stop those mergers?

Mr. Lee: It depends on the object of the exercise. I would not dream of disputing that some mergers are of benefit, but surely the hon. Member will agree that most of the mergers we now see are effected for one simple reason, to eliminate competition.
Yesterday the Daily Mail had a leader on this subject. I do not often look with approval on the Daily Mail leaders. The Daily Mail is very worried about monopoly, but only a few weeks ago it swallowed the News Chronicle which, a few months before that had swallowed the Daily Dispatch. Now it is concerned about the prevalence of monopoly in our economy. It depends on the reasons for these things. I think this is the main challenge if we have now passed the stage, as I believe we have, where in most of industries competitive private enterprise cannot function and the public must consider whether they want public monopoly.
I turn from the responsibilities of Government to those of industry itself. I believe we have confused the issue very greatly by this rather sloppy sentimentality about partnership in industry. I do not believe there is, or ever can be, complete and equal partnership as between employers and trade unions and private enterprise. All vital decisions have to be taken by management. [An HON. MEMBER: "That applies to public ownership as well."] Of course they have to be taken by management in public industry also. They have to be taken by management often without consultation with the trade unions. In that situation, the only function of trade unions is to react to whatever attitude or decision management has taken.
The Prime Minister reminded us the other day of Mr. Baldwin's oft-quoted sentiments:
Power without responsibility is the prerogative of the harlot throughout the ages.

I believe the British trade unions have been denigrated because they have accepted responsibility without power in the field of management. There is a very wide field in which the trade unions must accept responsibility, but it is not in the field of management. For instance, there is the need for new wages structures which take into account differing degrees of modernisation within a given industry.
There is need now for more local autonomy by local trade unionists in making their own decisions on wages and so on without being tied to a national basic rate which cannot take account of different degrees of modernisation. A national basic rate has to presuppose the existence of individual piecework bonus schemes. In my experience, in many sections of industry the very presence of a piecework scheme is proof of failure to modernise. In modern methods men cannot possibly determine their rate of production. The only real answer to demarcation disputes is further amalgamation for the unions within a given industry. I was pleased to see the other day that in the shipbuilding industry we had one only.
I believe the trade unions must think more in terms of annual wage settlements to take account of redundancies and short-time working. They must campaign to ensure that skill, danger, dirt and responsibility are reflected in the wage packet. They must share responsibility with Government and employers for the restraining of workers whose jobs disappear with the coming of automation and technological change.
There is great work for the unions to do. I should like to see them undertaking more studies into the use of leisure time, which will become one of the great issues before long. I should like to see them trying to bring more of the arts and culture to their members—the creation of theatres and that kind of thing. I should like to see them producing more research departments and more public relations departments. I believe that these form the sort of division of responsibility within industry. I do not believe that by sloppy sentimentality about joint responsibility for things over which the trade unions have no power at all we shall ever make much headway.
I do not see how the Government will now be able to enthuse working people


with the need for extra effort because of the great dangers facing the country. Only by renouncing the cult of "You have never had it so good" and stating in plain and honest terms that our economy is in serious trouble can we hope to enjoy the uninhibited co-operation of managements, trade unions and workers How this spineless crowd ever begin to do that I cannot even imagine.

5.21 p.m.

Mr. Julian Ridsdale: The speech of the hon. Member for Newton (Mr. Lee) contained some pearls of wisdom about apprenticeships and competition; it contained some new thought about the unions and monopoly, but, my goodness, it contained some words of despondency about the comparison of this country's position in 1960 with its position in 1950 at the time of Korea.
I congratulate my hon. Friend the Economic Secretary on his speech. I hope that the words he employed in telling us of the comparisons between us and Germany, the strength of sterling, and particularly the words he used about productivity and restrictive practice, will be translated into action in the Budget.
When I spoke in the economic debate last November I had just returned from a tour of Asia. What struck me then—it still strikes me—was the terrifically high standard of living we demand in this country compared with that in other parts of the world. We just do not seem to be aware how fortunate we are to have plenty of food—meat and bread-television sets, washing machines, Hoovers, h ouses, a health service, old age pensions and free education. Against this, in Asia it is usually houses no better than mangers to live in, a handful of rice a day, dusty roads, disease, and an expectation of life of about 32, compared with double that in this country. Admittedly there is sun, against our damp and rain and cold, but famine occurs too often, and there is threat of famine in China today.
How true the saying is that an increase in appetite grows with what it is fed on. The demand seems to grow each year for more schools, more universities, more hospitals, more drugs, more roads, more pensions, more wages, and more money for local government. All the

public seems to want less of is taxes, rates and rain.
As productivity does not increase, it is not to be wondered at that, although our exports rose by 6 per cent. last year, our imports rose by 14 per cent. The real problem before us is at what level of activity we can balance our exports and imports. Bearing in mind the needs of the people in Asia and Africa, obviously the higher level of activity that we can keep up the better it will be for them and for world trade.
In that context I welcome the Government Amendment, which draws attention to
the present high levels of employment, investment and consumption
and the efforts being made in the export field. But do we realise that we are a trading nation and that the world does not owe us a living? Surely, short of international action being taken to expand world trade, we must live within our income at home?
In this context I fear that because of the very high level of investment and consumption, which we are trying to maintain both together, we are weakening the country's economic and financial position. Indeed, because of it we are putting up our costs and, in the end, making it more difficult to expand our exports to the highest level of activity. The Government, I feel, under-estimate the importance of costs.
I therefore plead with my right hon. and learned Friend the Chancellor of the Exchequer to keep Government spending at a steady proportion of the national income. If it increases, let those who are able to afford it pay, and not the old-age pensioners. Yet, while hoping that my right hon. Friend the Minister of Health will give us that safeguard tomorrow, I am glad that he has acted in the way he has. With all his experience at the Treasury he knows the kind of strain which is being put on our resources when spending gets out of hand—the kind of spending which can temptingly be met by deficit Budget financing at the expense of the price level and inflation.
I wish there was a determination, similar to that evinced by my right hon. Friend the Minister of Health on the wages front to get over to the country the truth of our costs position. I hope


that my right hon. Friend the President of the Board of Trade will state the reason for the rise in the cost of living when terms of trade still remain in our favour. I hope that he will tell us what is likely to happen to prices this year. I fear that stability in prices is now threatened by new wage demands on top of wage increases since 1959 and 1960, the period of price stability when real wages increased by 29s. a week, or by 14 per cent.
I certainly want to see a steadily expanding production, as is called for in the Opposition Motion. But the lesson of Italy, Germany, France and Japan, countries which show a marked increase in production, is that this comes only if the unions moderate their demands for wage increases—that is, only if savings increase a great deal more than at present. We must face the fact that we spend 65 per cent. of our national income on consumption, compared with 56 per cent. in Germany.
I welcome the facts which my right hon. and learned Friend told us about yesterday. He said that in 1960 the general level of activity in this country was very high. He then said:
There were 42,000 fewer unemployed in January, 1961, compared with January, 1960. Earnings are up.
My right hon. and learned Friend drew attention also to the rate of increase in our industrial production between 1958 and 1960. He said that there had been an increase of 15 per cent. in 18 months.
I welcome the words he used to describe the increase in investment in this country. He said:
… in private manufacturing industry investment has gone up during 1960 by 24 per cent. It is estimated that in 1961 it will go up by a further 30 per cent."—[OFFICIAL REPORT, 6th February, 1961; Vol. 634, cc. 55 and 63.]
But let him note that all the evidence at the moment goes to show that, if an extremely high rate of investment and consumption go hand in hand, they may lead to a strain on the reserves or a considerable rise in prices. After the brakes were applied in 1955 we had to pass through three years of stagnation before industrial expansion could be resumed with safety.
I listened very carefully yesterday when the Chancellor of the Exchequer spoke about Sir Oliver Franks's state-

ment to the Lloyds Bank shareholders. After my right hon. and learned Friend's criticism, it is only fair to pay a little more attention to what Sir Oliver Franks said.
When we boast about consumer expenditure being higher than ever we should be aware of what he said. He said:
Expansion which is bought at the cost of the exchange reserves and the stability of the country can only harm us in the long run. To put sterling second and go all out for expansion is not a possible policy for Britain.
Given that the Government cannot restrain wage demands, I am certain that the Government, if they want investment and expansion, must moderate consumption—that is, unless they are prepared to let sterling go, which, in my view, would be disastrous.
I would refer those who say that a little inflation is good for growth to the concluding sentence of Phelps-Brown's article in the current issue of the Economic Journal on "Distribution and Productivity under Inflation, 1947–57"—covering 25 countries. He says:
Differences in the rate of inflation have not been systematically associated with differences in the rate of real income per head within the present material. It is instances of a lower rate of inflation being associated with a higher rate of growth of real income that predominate.
The Government cannot show or say too often that the strength of sterling and the stability of prices are their primary aims, and I welcome what the Economic Secretary has underlined today. I welcome, too, the Chancellor's reference yesterday to our increased holding in the International Monetary Fund and the state of our reserves, but I hope that in the coming Budget he will show that the strength of sterling is his No. 1 aim.
The National Economic Review talked about the devaluation of the £ as though this would somehow automatically lead to an improvement in our international economic position. In my view, any such measure would be an acknowledgement of defeat. Let us put sterling and the stability of prices first in our economic aims, otherwise I fear a disastrous fall in our standard of living, a great threat to our present employment position, and a failure to help those people in Asia and Africa who so earnestly desire that help.

5.33 p.m.

Mr. R. E. Prentice: I thought that in the earlier part of his speech the hon. Member for Harwich (Mr. Ridsdale) was almost falling back on the argument that because we are better off than are the people of Asia the Government's record was not too bad. I felt that if that was so, the arguments on behalf of the Government had reached a rather low ebb.
One point in the hon. Gentleman's speech that I want to take up is his reference to the effect of wage demands, and the little lecture he gave to the trade unions to be more moderate in that respect because of the effect on costs. Far too many people use the workers' natural wage aspirations as a sort of excuse for national economic failure. The fact is that in any free society, given full employment, and given the freedom to organise in trade unions, the aspirations of ordinary people for a higher standard of living will always make themselves felt in the form of wage demands.
That situation can be tackled either by suppressing trade unions or by heavy unemployment, but not in any other way. In recent years, every other industrial country has experienced a series of wage demands year by year, but the contrast between Britain and those other countries is that in their case the rise in national production has kept pace with money incomes but has failed to do so here because of Government policy—

Mr. Ridsdale: I ask the hon. Member most earnestly to get his facts right, and to look at the position in Germany where it is the very moderation of trade union demands that has contributed so much to the present economic success there.

Mr. Prentice: I have studied the position in Germany, and I have discussed it with German trade unionists. The fact is that the rate of increase of wages in the recent past in Germany has been a little faster than it has been here. When the rapid expansion of social services there is added to money wages, the real wages of the German workers are now at about the same level as ours. That is something that has helped to stimulate growth in Germany. It has not had the effect that the hon. Gentleman and some of his hon. Friends have suggested.
We have had from the Economic Secretary today and from the Chancellor

yesterday a number of elaborate excuses for the poor production record of Britain under the present Government. These excuses have taken the form of selecting a country here and there—the Chancellor selected Germany and the Economic Secretary selected France—and trying to suggest that there were special reasons why those countries have expanded more quickly than we have. If those countries alone had expanded more quickly, then, of course, one might be prepared to concede some of the argument, but the real fact is that it is Britain that is the exception to a general trend of increase throughout the industrial countries.
Many of my hon. Friends have drawn attention to two sets of comparisons. The first is a comparison between the British record under this Government and its record under the Labour Government, when our rate of production every year expanded by at least twice as much as under the present Government. The other comparison is between Britain in recent years and other countries in recent years. I want to remind the House of a third comparison, which I derived from reading some extracts from a recent Report of the United Nations on the development of the world economy during the 1950s.
The extraordinary thing that emerges is that Britain, alone among the industrial countries, was the only one whose expansion in the 1950s was lower than it was in the 1920s—and the latter was not a decade of particularly remarkable economic expansion. Perhaps the House will bear with me while I quote a few figures. The United Kingdom average rate of expansion in the 'twenties was 2·9 per cent. a year, but in the period 1950–58—the period taken for the survey—it was only 2·2 per cent. In France, in the 'twenties, it was 2·3 per cent., and in the 'fifties, 4·3 per cent. In Germany, the figure in the 'twenties was 2·8 per cent.—but 7·4 per cent. in the 'fifties.
The Report goes on to analyse some of the reasons for this, and in a moment I want to quote just one paragraph that refers to the question of economic planning. Before doing so, I would remind hon. Members that we have had a lot of scorn poured by Government spokesmen on economic planning. The Economic Secretary spoke of the airy-fairy


ideas on this side, and the Chancellor trotted out the old platitude about the gentleman from Whitehall not knowing best. Both of them used scares about food rationing, direction of labour, and the rest.
This United Nations Report draws attention to the fact that many countries—specifically, France, Italy and Japan—although maintaining a system of private enterprise have nevertheless had a long-term economic plan produced by the Government, quoting targets for investment and for production, and other indices, over a number of years. In the case of France, it was a plan originally produced by leading civil servants—M. Monnet and others—and carried through despite financial and political crises and changes of Government—always putting the priority on a certain definite expansion in their economy.
The paragraph I have in mind states:
The main advantages of such long-term programmes have been that they have helped to give a sense of direction to long-term policies and to enhance the flexibility of short-term policy. They have been instrumental in providing the general setting for expansion.
I believe that the important words there are "sense of direction". The Economic Secretary, quite rightly, told the House today that economic progress does not pend upon decisions of the Government alone. It depends upon many other decisions. Of course it does, but it is the Government alone who can, as it were, set the climate of opinion.
If the Government succeeded in convincing people throughout the country that they were determined that there should be economic expansion, that they were planning for economic expansion and they would take the necessary steps as a Government to play their part, then, I believe, thousands of people right down the line would make decisions based on the assumption that the economy would expand. The production manager planning years ahead, the man in charge of technical training in a firm for years ahead, or a board of directors looking at investment for years ahead would make their decisions on the assumption of continual expansion. This is the type of climate of opinion which most industrial countries have succeeded in generating in recent years. In Britain it has not geen generated because the

Government have given no such lead and their economic policy has been based on fits and starts, not on the assumption of continual expansion.
That is the principal conclusion of the United Nations Report on world economic developments in the 1950s. It is also, of course, the principal conclusion of the report by Political and Economic Planning which has been quoted several times in the debate. Indeed, the P.E.P. Report says that there is not in Britain any public opinion really expecting expansion and there is not a national mood which expects the level of production to go up and, therefore, the standard of living to rise year by year.
I think that the only other major country in which this has been true in recent years is the United States. In America also there has been a measure of economic stagnation. The significant fact about President Kennedy's economic Message to Congress is that, in the very first paragraph, it says, in effect, that, despite balance of payments difficulties in the United States and the other troubles being experienced there—"We are now going to expand; we cannot afford the amount of economic slack which we have had in the past; the American economy is not producing as much as it should, and we must take measures to see that it does". Therefore, in the United States, the Administration has turned its back on fuddy-duddy Conservatism. It is time that Britain did the same, unless we are to become an economic backwater in a world which is expanding much more quickly than Britain is.
One of the most deplorable aspects of the Government's attitude is that they actually derive political advantage from the national mood of not expecting expansion. During the last election campaign they were able to boast of the modest progress which had been made in the eight years since 1951 as though this was a remarkable achievement, as though any industrial country in eight years does not make some progress. They were able to boast about it as if, somehow or other, they had produced it out of the hat and they were able, at the same time, to suggest to people—I fear that they suggested it successfully to many—that a programme of economic expansion and social reform was a sort of confidence trick.
When we said, as we were entitled to say, that there was slack in the British economy and we could expand faster than we had been doing and that, if we did so, we could afford better pensions and other social reforms, it was suggested that this was some sort of confidence trick inducing people to believe that they could have something for nothing. We are, therefore, in a vicious circle in which a bad Government have deliberately put into the public mind, and encouraged in the public mind, a mood of pessimism about the future which, in turn, has led many to support that same Government at elections instead of acting on the belief that this country should go forward to achieve all that it could.
Turning now to manpower, I take as my starting point what I thought was the defeatism of the Economic Secretary when, giving it as one of the reasons why we could not expect much achievement in future years, he said that there could not be any considerable increase in the labour force of this country. I strongly support what my hon. Friend the Member for Newton (Mr. Lee) said about the level of unemployment today. Government spokesmen are far too smug about what they call full employment. A figure of 418,000 unemployed, the latest available figure, is not one of which they are entitled to be proud. For long periods since the end of the war, the number of unemployed in this country has been below 300,000, not over 400,000.
Even admitting that in January there is a seasonal element in the figures, I still believe that we have a large reservoir of unnecessary unemployment which could, perhaps, be put as high as 100,000 unnecessarily unemployed. This is a human tragedy in every unnecessary case, and, apart from that, it is a waste which this country simply cannot afford, particularly when one remembers that figures of registered unemployed always tell only part of the story. As my hon. Friend said, there is a great amount of short-time working now. Also, in those areas where employment is difficult, many elderly people, married women and others do not register for work because there is no chance of a job. The real incidence of unemployment is higher than the figures reveal. We cannot afford waste of that kind.
More than one speaker has said that there is a bottleneck in skilled labour. I think that this view has some validity. I was glad to note that at the meeting of the National Production Advisory Council last week both the Chancellor of the Exchequer and the Parliamentary Secretary to the Ministry of Labour referred to this problem. We face a bottleneck in skilled labour which, in its turn, may mean unemployment for unskilled labour. Indeed, what I fear is that we may, in the years to come, unless several changes are made, face an increasing shortage of skilled labour accompanied by growing unemployment among unskilled workers. That is a very real possibility, and I am glad to see that the two Ministers concerned recognise it. It is not, however, good enough for Ministers to recognise the problem. The Government should tell us what they intend to do about it.
This is partly a matter of technical training. I should probably be out of order if I pursued it now, but I hope that the recent White Paper from the Minister of Education on that subject will be debated in the House because, although it is good in parts, it is very unsatisfactory in other parts and a great deal more needs to be done.
Another subject calling for attention is the retraining of skilled men who lose their existing jobs. I believe that there is probably a great deal of wastage of skill in this country which is not generally recognised. We are living in a period of technical change and, probably, if any forecast about the next twenty or thirty years is reasonable, it is that the pace of technical change may well increase. Therefore, people who trained for a skilled job may in time find that the skill they have acquired and on which they have based a certain standard of life becomes outdated and they can no longer earn a living by it.
This is a human problem which is sometimes not recognised by those who criticise trade unionists who resist change. Speaking as a trade unionist, I do not think that trade unionists should resist change, but, on the other hand, I am quite certain that, unless society provides a framework in which people are not afraid of change, they will, of course, resist it. We ought to think much more about the problem of the skilled man who


sees his job disappear and who sees his only prospect of future employment in unskilled work. This should be the subject of a Government survey. We know that some people in this position are retrained by their employers. Some—a very small number indeed—are retrained at Government training centres. But how many, in fact, have to take unskilled work, which means waste from the community's point of view as well as a lower standard of living for the families involved? It is a waste which we cannot afford, and I regard it as a feature of our present economy which ought to be considered very much more closely.
I come now to the training of young people. I wish to set this matter against the background that we shall face this year, next year and the year after, that is to say, the special problem created by the number of school leavers. The so-called bulge, which has for many years worried educational planners, will start spilling out on to the labour market in about six months. The number of boys and girls of school leaving age this year is higher than the number last year in the proportion of about five to four. The increase is nearly 25 per cent. Next year, it will go up still more; in 1962, there will be four school leavers for every three in 1960.
This is a very large number of extra young people. The point that I want to put to the House is that this is a serious problem and, at the same time, a unique opportunity from the economic point of view. It is a serious problem because we have a duty to those young people to see that they have the same employment opportunities as their predecessors—the same chance of a job, the same chance of choosing their job, and the same chance of a worth-while job as those who have gone before them.
This bulge period coincides with the end of National Service, which will itself aggravate employment problems for young people. I do not need to remind the House that in some parts of the country there is already difficulty in finding jobs for school leavers. My hon. Friend the Member for Blyth (Mr. Milne) put a Question yesterday to the Minister of Labour drawing attention to unemployment among young people in his constituency. If that is the case now, the

problem will become much bigger at the end of this year and in the two years ahead. One thing which is quite clear is that if there is any sort of recession in this period those young people will be the first to suffer. Before employers start making other people redundant they will stop taking on new labour. This is a serious problem which may become a major problem if there is not a steady expansion of the economy over the next two or three years.
I said that the bulge also presented an opportunity. It is a once for all, never to be repeated opportunity to increase quickly in the course of a few years the number of skilled workers. It is a tremendous opportunity. This has been recognised by many people, including the Carr Committee, which reported in 1958, and by all kinds of spokesmen in industry. I understand that a German industrialist said to a member of the Carr Committee, "We Germans envy you your bulge", meaning that here was an opportunity which the Germans would like to have to train in a few years a large extra number of young people. My fear is that this opportunity may not be taken. I do not think that the problem is recognised widely enough.
A few weeks ago I took part in a conference at Barking organised by the local youth employment committee. Various local bodies were invited to take part in the conference. The attendance of the trade unions was poor. The attendance of local employers was almost non-existent. The only group of people who turned up in large numbers were local educationists—school teachers, education officials, and so on. They turned up because they were already aware of the problem of the bulge with which they had been working through the school life of young people. But there is not enough awareness among the public and industry of this problem, certainly not enough to take advantage of the opportunities which will be presented.
I think that far too many employers are still content to poach their skilled labour from other firms which have training schemes. What is being done by the best firms in training young people is very good. Some of the best firms have agreed to expand their training facilities in time to cope with


the bulge. There are, however, still far too many firms which are not playing their part. There are also far too many trade unionists who take a restrictive attitude towards training apprentices. They are in the minority because many leading trade unionists have played a large part in the work of the Carr Committee and of the Industrial Training Council. But among some trade unionists there is a misplaced fear of training too many skilled workers because of the effects of a slump, but they ought to realise that if there is a slump the unskilled workers will suffer most and the skilled workers will tend to be able to keep their jobs. If there are too few skilled workers it makes a slump that much more likely.
Above all, the Government themselves, rather than either side of industry, have to do more in this problem. It is the Government who should have intervened strategically and decisively. I think that in particular some sort of financial measures are needed. I should have hoped even at this late stage that consideration would be given in Government circles, perhaps in relation to the Finance Bill this year, to doing something to encourage industrial training. In France there is a special levy on all firms which employ skilled labour. The firms which do their share of training receive a payment from the fund which is created. The firm which does its share breaks even, the firm which does more than its share gets a subsidy, and the firm which does less than its share helps to finance the others. Something like that will have a healthy effect on the attitude of some employers who are dragging their feet.
There are many other things which the Government could do. They could train more young people in Government training centres. They could expand the work of the Industrial Training Council and employ training development officers to stimulate group schemes. In all these matters the Government seem to have relied on exhortation. I support them in their exhortations. I am glad to hear that the Minister of Labour is to address a number of regional conferences on this problem. But exhortation is not enough. If we find in six to nine months' time that these young people, having left school, are not getting the opportunities which they deserve, it will be too late for

the Government to start introducing the necessary measures. This is something to which I hope we on this side will return on many occasions, and I hope that we shall have the support of some hon Members opposite.
In conclusion, the Government's attitude to the problem of training young people to which I have referred at some length seems to me typical of their whole approach to the country's economy. What is lacking above all is any sort of positive and energetic lead in developing the great potential of which this country is capable. The British people are capable of doing a great deal more to raise production and increase exports and to reach a higher standard of living than they have done in recent years
The Government at times have deliberately damped down the initiative of the people. When a Labour Government were in power, and when our production was increasing at more than twice the rate it has been increasing recently, we had the same work people and managements. The factor which has changed is the Government. The Government not only have allowed but have encouraged a stagnating attitude and have helped to destroy industrial morale. They have helped to create a society in which the tax avoidance man is more important than the production engineer. There will be a change only when we get rid of the stick in the mud, fuddy-duddy conservatisim of the tired old men in charge of our destinies and start planning the economy of this country and leading it towards better things.

5.58 p.m.

Sir Henry d'Avigdor-Goldsmid: The hon. Member for East Ham, North (Mr. Prentice) made a most agreeable speech. One is bound to respect his deep interest in the training of apprentices and young men in industry and the thoughtful observations which he made. I cannot, however, congratulate him on his concluding remarks, which seemed to me to smack of most of the other speeches which we have heard from hon. Members opposite in the last two days. They were not worthy of what went before.
There were one or two points in the hon. Member's earlier remarks to which I would like to draw attention. We have heard many speeches, mainly from hon. Members opposite, indicating the very


great advantages there are in having a national over-all plan. I would mention in parenthesis that there is only one country in Western Europe which has had a total economic breakdown in the last three years. That is a country which suffers from an overdose of socialist planning. I refer to Poland. I mention that en passant.
The other point concerning the hon. Member's speech which I must make is that he found an entirely new reason why he and his hon. Friends lost the last election. He said that the Government had engendered a spirit of pessimism concerning the future of the people of this country which made it impossible for his party to win at the polls. If this side of the House engendered pessimism in the people of this country, I can only say that the views expressed by hon. Members opposite engendered something which was a great deal more depressing and less encouraging to voters.
On the second day of a debate like this, it is difficult to make any new contribution. As one of, I should think, the small minority of hon. Members who open their own correspondence. I had the advantage this morning of reading President Kennedy's balance of payments mesage. We had some flattering references to President Kennedy from the hon. Member for Newton (Mr. Lee). I only hope that the hon. Member knows more about President Kennedy than he does about the health service in the United States.
The President's message is a most inpiring one, quite apart from the attractive photograph on the cover. If we were to have a balance of payments message from my right hon. and learned Friend the Chancellor of the Exchequer, I suggest without any disrespect to my right hon. and learned Friend that it might be advisable to have on the cover the portrait of the right hon. Lady the Joint Parliamentary Secretary to the Ministry of Pensions, who might be much more appropriate.
The President's message contains 14 proposals. To describe them roughly, they might be said to be by Harvard out of Downing Street. It is interesting to see how closely these proposals conform to the actions of Her Majesty's Government in the various fields. The President's first proposal is for the improve-

ment of international monetary institutions, to which my right hon. and learned Friend the Chancellor referred yesterday. His second proposal concerns the use of drawing rights on the International Monetary Fund by the United States, a technique adopted some years ago by my right hon. Friend the Prime Minister.
The third proposal concerns a special inducement for dollar holdings by foreign banks in the United States. A similar effect is achieved by our current Bank Rate activities in this country.
The fourth proposal is the prohibition on holdings of gold by Americans outside the United States, a prohibition which already exists for the inhabitants of this country.
The next is a proposal of support for the O.E.C.D., which, again, has the wholehearted support of Her Majesty's Government.
Then comes a point on exports promotion, which certainly my right hon. Friend the Prime Minister and the whole Government have supported with considerable activity.
Proposal No. 7 relates to the stabilisation of costs and prices, a subject which has been rather glossed over in this debate although it features largely in the Government's programme.
Then, there are proposals for the financing of exports by increased credits. We had an exactly similar proposal yesterday from my right hon. and learned Friend the Chancellor of the Exchequer. The next point concerns tourism, which also is a subject in which we have not been behindhand. It is followed by a point on agricultural exports, which might well be brought to the attention of my right hon. Friend the Minister of Agriculture, because I have not noticed in our own projects much planning for the export of agricultural produce and attention might be paid to this proposal instead of dismissing agricultural products simply as something which we have to consume ourselves.
Then comes an important reference to the policy of economic assistance to other countries. President Kennedy acted with real generosity when he said that the restrictions now in force, which necessitate purchases made with United States funds being carried by United States carriers, should be retained for only a limited


period until equilibrium is reached. In other words, the President does not see any positive permanent advantage from such a policy but regards it merely as a short-term expedient.
The next two points concern the removal of tariff discrimination and the promotion of foreign investment, a matter which has been in the forefront of the minds of the Government and their advisers. We can only say that the American message entirely copies the British policy.
Next in the President's message comes a point in which we are in complete contradistinction. President Kennedy refers to the abuse of tax havens, or the equivalent of what we call O.T.C.s, whereby we grant tax reliefs to overseas trading companies. The President is examining whether, in the present state of the United States economy, these facilities now serve a useful purpose. It might be useful if we were to examine them, too. The next point is the maintenance of assistance to the undeveloped countries. Again, there is no suggestion that this should be cut. It is a burden which the United States economy must carry. Then follows a small point about reducing Customs exemption for American citizens on goods which they have purchased abroad. We do not have such exemption and, therefore, this does not apply to us. Finally, there is a proposal for a review of outgoings by the Treasury and of United States military expenditure.
To sum up, it can be said that with the one exception to which I have referred, these proposals are fundamentally the policy of Her Majesty's Government. Here, however, they have not been announced with a fanfare of trumpets. They have been announced in bits and pieces, by degrees, being almost forced out of Ministers who have made speeches here, there and everywhere from which we have had to draw our own conclusions. It occurs to me that my right hon. and learned Friend the Chancellor of the Exchequer might easily issue a balance of payments message on similar lines. If presented vigorously, forcibly and with confidence, it would give that element of leadership to the lack of which my hon. Friend the Member for Halifax (Mr. Maurice Macmillan), in his striking speech yesterday, drew attention.

Mr. Prentice: Does the hon. Member agree that the message which he has analysed from President Kennedy was the second of two economic messages and that in the first paragraph of the first message, the President said that what was needed above all in the United States was a rapid expansion of production, in contrast to the relative stagnation of recent years. Therefore, the hon. Member is not entitled to say that the policy contained in President Kennedy's economic message corresponds with that followed by his right hon. Friends. It is, in fact, in contrast to it.

Sir H. d'Avigdor-Goldsmid: From his new seat on the Front Bench, the hon. Member is now making a second speech. He should make his speeches at the proper time. All I would say about the hon. Member's remarks is something which I had not intended to say. I am reminded of Oscar Wilde's play, "The Ideal Husband", in which Lord Goring, a rather dilettante character, is attacked by his father, who says to him, "I do not believe you understand a word of what you are talking about", to which Lord Goring replies, "I do if I listen attentively."
I return to my earlier point concerning the use of the resources of the International Monetary Fund. In all human nature, there is a feeling that somewhere or other there is a golden key to be found if only we look for it long enough and that it will unlock the gate to happiness. One practical form of this feeling is demonstrated by those who support the football pools, who still feel that one of these days the golden key will be found. This philosophy is not really sound as far as nations are concerned. The financial key is not one that is buried in the brains of Harvard professors, not to be found at the bottom of a well. The only solution for nations of their difficulties is enterprise, work and proper policies. That is why I wanted to look a little at this story about the extended use of the International Monetary Fund as if it would cure all our difficulties.
My right hon. Friend the Member for Birmingham, Hall Green (Mr. Aubrey Jones) lent his name to an article in the Sunday Times —and I say, "lent his


name advisedly, because I am not suggesting that he wrote it, but his name featured at the top of it—which indicated, that devaluation and the floating £ might be a solution to our problem. If ever there were a short-term solution with infinite long-term dangers, it is devaluation. We all know that devaluation gives an immediate boost to exports, because everything we bought before the devaluation of our currency is now apparently twice as valuable and, therefore, our selling prices in the world are immediately competitive. But competitive devaluation is, I hope, a phase that the world is out of. I think we can say that we have been there before and do not want to go there again.
So, instead of devaluation, we have a few painless ideas. It is quite clear that there are obvious disadvantages to devaluation. I was particularly inter-tested in the Economic Review, because it produced two of them. The first was the question of raising the gold price all round. The obvious disadvantages to that is that it benefits only the holders and producers of gold and it has the enormous disadvantage that it destroys confidence in currencies so that gold, instead of going to swell the means of international settlement, gets diverted into private hands. As far as we are concerned, if we went in for raising the gold price and competitive devaluation, we should be betraying the people who had left their money here, the holders of sterling balances.
The Economic Review, at page 46, says:
This could be met by an early decision to compensate overseas holders for any reduction in the gold value of their balances.
Without being particularly gifted in mathematics, I have noticed that our sterling liabilities are in the neighbourhood of £4,300 million and our gold reserves, as mentioned by my right hon. Friend the Chancellor of the Exchequer yesterday, is £1,150 million. If we are to compensate the holders of £4,300 million out of this £1,150 million, it is perfectly clear that, however much we write up the price of gold, there will be no net addition to our reserve by such action. I should like to go on record in this sense because this Review is usually considered on both sides of the House to be fully thought out and very sound.
There is the final view, which I think is seized by President Kennedy, and advocated by Professor Triffin, in his book, Gold and the Dollar Crisis, which hon. Members have had an opportunity of reading. The theme of this story is that it is too much of a strain both on dollars and sterling to expect them to have the duty of being the reserve currencies of the whole world. I think it was Lord Keynes' idea to create a new currency which would be a world reserve currency. I do not think this theory stands up to practice.
What are reserves and why do people have reserves in gold, sterling and dollars? It is because ultimately sterling and dollars are a claim on goods and services and because holding sterling, or holding dollars, they have a claim on goods and services produced either here or, indeed, in any part of the world and they are, therefore, content to leave their money with us.
Putting it shortly, the theory which, as far as I can see, is being seized on by President Kennedy, is that all sterling and dollar claims held by foreign official holders should be converted into deposits at the International Monetary Fund in return for long-term International Monetary Fund claims against Britain and the U.S.A. Only one or two things can happen with regard to that. Either these deposits in the International Monetary Fund currency could be immediately convertible into sterling dollars or other currency, and so available for use—and in that case it would seem to me the whole operation had served no useful purpose at all—or they would not be available for conversion. In that case the nations who converted their reserves into the International Monetary Fund currency would find that they were fairy gold and they could not use them when they wanted them.
One has seen in the financial Press that people who deposit money with hire-purchase houses which have got into trouble when they have found that what they thought were cash reserves on which they could draw were transformed into very long term debts indeed. They have probably had to accept the transformation because there is no other way of their recovering more than a percentage of their deposits. Anybody scenting such a situation in the wind would take urgent


steps to withdraw that deposit before such a blocking took place. I suggest that that is exactly what would happen if this plan were in danger of acceptance. The United States and Britain might like it very much, but our creditors would hurry very quickly to get their money out of our clutches and, presumably, into the form of gold rather than run the risk of seeing it blocked.
The moral is that Britain and the U.S.A. must achieve sound currencies by their own policies and efforts. There is no gimmick which will provide this result for them. The Economic Review puts very well what the requirement is. I quote from page 49:
The need is for a strategy which, while accepting that the economy cannot this year grow as fast as it might, at the same time convinces industry that the economy will grow rapidly and steadily in future years.
This is a goal that can be achieved, but there are one or two requirements. The first is political stability. Thanks in some measure to hon. Members opposite, it appears that we are in for a considerably extended period of stable Government.
The second is a sense of responsibility by Government, both to the people of this country and to foreigners who do business with us. It is clear that our responsibility to foreigners who do business with us must be that if they purchase goods from us we deliver them in time and that if they leave funds with us they can be withdrawn or used properly by them. Our sense of responsibility to the people of this country must be to induce the feeling that our task in the world is not ended and that we all have a great part still to play. Therefore, a Government which gives the impression of discriminating in favour of one class or another might forfeit that confidence. I leave that thought there.
Finally, we must have fiscal policies which must aim to leave the worker, whether by hand or brain, in possession of a reasonable and acceptable proportion of his earnings, and a policy which would ensure that he would benefit materially from an increase in those earnings. President Kennedy has many admirers, and I confess that I am among them. I was greatly impressed by reading these words of his:

I place everyone on notice that those few American citizens who are tempted to speculate against the dollar will not profit in this manner.
I wish very much that my right hon. Friend the President of the Board of Trade who, I understand, is to wind up the debate could find it possible to say something in these terms, "I place the world on notice that those who speculate on divisions among the British people and on their irresolution in meeting their current difficulties will not profit in this manner."

6.22 p.m.

Mr. Bruce Millan: I must declare a certain amount of difficulty in disagreeing or agreeing with a number of comments made by the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid). I am not sure that if I were Chancellor of the Exchequer or some other member of the Government I should have any clear idea of what exactly the hon. Member wanted me to do. I agree absolutely with him. however, that there is a tremendous contrast between the sort of statement made by President Kennedy, first of all on the economic situation generally and now on the balance of payments, in clear, precise terms setting out the various things that his Administration intends to do, and the great difficulty we have in knowing from Her Majesty's Government exactly what they intend to do about Britain's economic problems.
It struck me in the course of the Chancellor's speech yesterday and the Economic Secreary's speech today that there is a fundamental contradiction. They were saying, first of all, that of course it would be a very desirable thing for the British economy to be an economy of growth and that we should have an expansion in national production. But, at the same time, the bulk of their speeches represented an essay in self-justification of the reasons why the British economy has not been having the kind of expansion that we have needed in the last few years. Despite the fact that this is the second day of the debate, we have not yet had any clear idea of what the Government intend to do on many of the fundamental issues that have been raised from this side of the House.
First, there is the question of what kind of expansion we need. It is


certainly true that Government spokesmen have said that we need increased exports and an increased percentage of our national production going to investment, but, significantly enough, when the Chancellor mentioned yesterday the expansion in industrial production between October, 1958, and April, 1960, he first chose a closing date since which there has been virtual stagnation and, more significant, he chose an opening date which was precisely the day on which the stimulation given to the country's economy was the stimulation of consumer goods. It was in October, 1958, that hire-purchase restrictions were removed completely, and they had been quite stringent before that date.
The kind of expansion that we have had from the Government on the last two or three occasions has been expansion stimulated by a boom in consumer goods. This has been part of deliberate Government policy. It has not happened by chance. It has been deliberate economic policy and there has also been a deliberate political policy with the next General Election in mind. It is surely obvious by this time that that kind of stimulation of the economy that we had last time and the time before is not the kind of stimulation that will give us a steady expansion over a long period of years. I imagine that none of us is against hire-purchase in principle. Certainly I am not. I think that it has an important part to play in our economic life. But it is pretty obvious that the complete removal of restrictions on hire-purchase, which is what happened in October, 1958, gives a stimulus to the economy which contains a very large element of the artificial.
Figures for the last month or two, showing that some of the leading hire-purchase finance companies have got themselves into difficulties, are a demonstration of this fact. If hire-purchase and consumer credit generally are kept at a reasonable level there ought to be very little experience of bad debts for the hire-purchase finance companies. The fact that a number of these major companies have been getting into difficulties over the last few months is simply another demonstration of the artificial element that we had in the stimulation of the economy on the last occasion.
When hire-purchase restrictions are applied again, naturally there is a considerable agitation from the industries which are most directly concerned—the motor car industry, the electrical goods industry, the furniture trade and other consumer goods industries. There is agitation also in the geographical areas concerned for the rapid removal of restrictions. This is a pressure to which the Government have given in in the past. Now the Government, politically speaking, are not under the same pressure, because we are very much further away from a General Election.
But one has the greatest sympathy with the motor car manufacturers or the manufacturers of electrical goods when they say to the Government, "Look what you have done to our industries." After all, it has been previous Government policy which has positively encouraged them in their previous expansion. It is perfectly justified on their part if they complain bitterly to the Government that, having been encouraged to expand, they are now being subjected to severe pressures from the Government's economic policy which are landing them in serious difficulties and putting people out of work.
Like other hon. Members, I shall be glad when the Government are able to remove some of the restrictions that are hitting industries at present, but of course this policy of removing restrictions will not do anything about the basic difficulties of our economy. It is to these difficulties that I now want to turn. First, I think that all of us are very happy to have seen the considerable increase in industrial investment that we have had in 1960. We hope that the estimates of manufacturers, which contained probably an element of optimism, will at least be approximately approached. There is little doubt that we need an increase in industrial investment.
I doubt, however, whether this is really the basic problem that the economy is now facing. As my hon. Friend the Member for Grimsby (Mr. Crosland) said yesterday, it is becoming rather more difficult to see the direct relation between increased industrial investment and increased production in the economy as a whole that some of us used to look for in the past.
One of the particular difficulties facing Britain is that our economy has been working by fits and starts. We have not, therefore, been able to see just how much additional advantage there is to the economy in terms of additional production arising from increased industrial investment, because as soon as the economy begins to expand we get a damping down, a loss of capacity, and industries working to low capacity. We are, thus, unable to give the increased investment the chance it should have.
Even if we get the expansion in investment which we are hoping for during next year for the economy as a whole, it will be no use unless we can get a Government dedicated to a steady expansion of national production, because otherwise a good deal of the investment which—quite rightly—we are urging industrialists to indulge in will be misdirected effort.
I do not find all the arguments which have been used by the Chancellor and other Members opposite about the balance of payments problem terribly convincing. The problem is not new. We all have a fair idea about the things we need to do to solve it. The difficulty has been to get the Government to give the lead to our industrialists and manufacturers which they need if they are to follow the demands imposed upon them.
It seems that we in this country are not able to get an expansion in production for more than about a year or so without getting into balance of payments difficulties, largely because our imports go up very much more quickly than our exports to meet them.
It is not very profitable to argue—and there was a certain amount of it in the debate yesterday—about what kinds of imports have increased in the past year, because we have been seeing increases in all kinds of imports. Such increases are something to be expected. If we are to have expansion we must expect imports to go up in every direction, including the basic raw materials and manufactured goods. It is not profitable to split hairs about the kind of increases we have been having.
I also agree with the Government that import restrictions could be a short policy only and one which, if it was to our benefit, could work only to the dis-

advantage of others. If we have import restrictions we simply invite other countries to impose them as well.

Mr. Nabarro: Tell that to the right hon. Member for Battersea, North (Mr. Jay).

Mr. Millan: In the last analysis this country is no better—

Mr. Nabarro: Is the hon. Member quarrelling with his own Front Bench? Did he not hear his right hon. Friend the Member for Battersea, North (Mr. Jay) advocate yesterday that all luxury goods should be excluded by tariffs against West Germany and the United States?

Mr, H. Wilson: He said nothing of the kind.

Mr. Millan: My right hon. Friend the Member for Battersea, North (Mr. Jay) will no doubt answer for himself, but I listened very carefully to his speech, and he said nothing of the sort. However, I agree that a short-term policy of import restrictions is not likely to give us any long-term advantages.
The factor of private investment abroad has hardly been mentioned in the debate so far, except by the hon. Member for Halifax (Mr. Maurice Macmillan). I am not here talking about Government expenditure abroad—although one could say something about defence expenditure, or about Government assistance to underdeveloped countries—but about private investment.
It seems to be accepted as almost sacrosanct that we should have a net private investment abroad of about £300 million per annum. I am not sure that we can afford such a figure. I am not sure that we could afford it in 1960. I should like to see the Government taking a far more critical attitude towards this private investment. I am not sure that we can afford to finance office buildings in New York—something which has hit the headlines in the last month or two.
Naturally, we are all very glad that President Kennedy is determined to see that the International Monetary Fund works more effectively and that it becomes customary for nations in balance of payments difficulty to have recourse to


the Fund. I must add, however, that it is extraordinary—and we have had this reaction on other questions also—that the Economic Secretary today was completely vague about what the British attitude towards the negotiations about the Fund was going to be.
It is not treating the House with proper respect to say that, because this country is only one of sixty-five or so members of the Fund and only provides a certain amount in contributions, the Government must not say anything to the House about what their policy is to be until they have had an opportunity of discussing it at Fund level.
We are as entitled here, in view of the fact that we provide 15 per cent. of the Fund's contributions, to know what the British Government's attitude is to be, as the American people are entitled to have an announcement on that matter from President Kennedy.
The hon. Member for Walsall, South mentioned, with misguided approval, another statement by the President yesterday—something which is not nearly as much to our advantage, but indeed might be to our disadvantage. This was the definite intention of the United States Government to provide attractive interest rates in order to attract money to the United States.
This must represent a considerable threat to Britain, because we ourselves have attracted a great deal of short-term money through high interest rates available in London. If President Kennedy, faced with similar balance of payments problems, takes similar action to attract money to New York, then we may find ourselves in considerable difficulty.
Have the Government any specific proposals to put, either to President Kennedy, or to the West Germans or to anyone else, about some sort or international regulation of interest rates in order to avoid the same sort of things happening as happened with import restrictions, with one country getting short-term advantages by paying high interest rates and attracting money?
If it is right in principle that we should not adopt a policy of import restrictions, it must also be right in principle that we should be concerned about the international regulation of interest rates. What have the Government to say about that?
Finally, there is the question of exports. No amount of international agreement manipulated by the International Monetary Fund or anything else will get rid of the difficulty that we must continue to expand our exports. The Chancellor's points yesterday about medium-term credits and other factors were perfectly valid, and such things are obviously of a certain amount of help. But, as he and other Members opposite have said, ultimately what happens depends on the actions of individual industrialists.
It has also been said that if we are to get industrialists and industry generally to be efficient in exporting, then we will have to have them efficient also in home production. It is industrial efficiency as a whole that we look for—not merely efficiency in exports. If we get general industrial efficiency in the country, our exports will go up as a natural by-product.
We have continuing evidence of the fact that there are a number of important industries which seem to be inefficiently run. We have had two examples recently. The D.S.I.R. Report on shipbuilding—there were parts which I found it difficult to appraise, because they dealt with technical development and so on—significantly said that the shipbuilding industry had done very little research into production methods generally. This was nothing to do with technical equipment or with what kinds of engines ships were to have in future, or anything of that sort. This was dealing simply with production methods in the shipyards themselves. One would have thought that an industry of the importance of shipbuilding would have done a good deal of research into the question of the efficiency of production methods.
It is ironic that the D.S.I.R. should produce this as one of its main criticisms, because there is a constant whine from the shipbuilding employers about restrictive practices among the trade unions and about the difficulty of getting modern methods introduced into the shipyards because of the intransigence of the trade union leaders and the unwillingness of individual workers to adopt new methods.
If the D.S.I.R. Report is accurate, it is not a question of restrictive practices


among trade unions—and there is a certain amount in that. It is significant that, even if trade unions were willing to co-operate, the shipbuilding employers would not be able to put up specific and far-reaching proposals, because they would not have done the necessary research into production methods.
The second industry which has been in the news recently is the newspaper industry. Quite apart from the merits and demerits of the Odhams Press take-over—and we have discussed that a number of times—one of the things which seems to be becoming clear is that the newspaper industry is inefficient. For example, there was an article in the Observer —and presumably the Observer has some intimate experience of this matter—making the charge that if the industry were to work efficiently, production costs could be cut by no less than one-third.
I do not necessarily accept that figure, because I have absolutely no personal knowledge of whether it is correct, but the charge is made too often and with too much circumstantial evidence to be completely ignored, and it is clear that there must be an element of inefficiency in the newspaper industry. Significantly enough, it comes not exclusively or even mainly because of restrictive practices on the part of the trade unions, but because the major newspaper proprietors are quite willing to put up with inefficiency, which is a disadvantage to them, but a considerably greater disadvantage to the newspapers with small circulations.
If that charge is true, and if the sort of charge made against the shipbuilding industry and others is true, and we add to that the continual complaints which we get about the inefficient services which British industry gives in terms of after-sales service for exports, it all amounts to a formidable indictment of the inefficiency of British industry.
In those circumstances, it is irresponsible of the Government lightly to brush aside the pleas made from this side of the House that we should look into the monopoly tendencies of industry and some of the mergers which are taking place which seem to have very little to do with eliminating inefficiency and a great deal to do with eliminating competition.
I hope that the Government will look at this matter seriously. This need not be a party issue, because there are some hon. Members opposite who at least pay lip-service to the idea of competition, although not many of them are willing to carry that into practical politics. This is something which the Government ought to study, and I hope that they will look at it far more seriously than they will at some of the diversions about Surtax and so on about which we have heard from hon. Members opposite. There seems to be increasing evidence of a mentality among the leaders of British industry which is definitely anti-competition. That is something which will fundamentally affect our ability to do well in export markets and in every other direction.
I want finally to refer to our export record. It is true that last year we had a small increase in exports, as we have had increases in previous years, but one of the significant facts is the extent to which our proportion of world trade in manufactured goods has gone down over the last few years—it went down by another I per cent. last year. Manufactured goods form the mainstay of our export effort and if we are continually to lose ground to our international competitors in manufactured goods, we will obviously get into serious difficulty. We have lost ground so steadily and relentlessly over the past few years that the Government are not entitled to say that this is just another of those league tables which do not matter and that our exports have gone up by 3 or 4 per cent. over the previous year, and that that is all that matters.
The fact is that in many markets in which we previously had a pre-eminent position we have been defeated in the last few years, not only by Germany and Japan, but also, for example, by the United States, which has a very much higher wage-rate economy than we have and none of the advantages of having had a devastated economy during the war—the kind of excuse which the Government put up when explaining why we are doing so badly as compared with Germany and Japan.
Practically every Opposition speaker has said that the Government first have to give some sort of coherent picture and some sort of coherent idea of what it is that they expect of the British


economy and people. It should not be true, as the hon. Member for Walsall, South said, that we should have to drag out Government policy bit by bit from a series of speakers over a period of many months. It is not right that the Chancellor of the Exchequer should yesterday have made what my hon. Friend the Member for Grimsby called a debating speech in the worst sense. It is not good enough that the Economic Secretary this afternoon should have poured scorn on our views about a national plan, calling them paper plans, airy-fairy ideas and so on. We could stomach all that if we had any sense that the Government were themselves presenting specific policies and concrete plans to us. So far we have had nothing like that.
I suppose that there is still hope. We still have to have a speech from the President of the Board of Trade, but, judged by the recent performances of the right hon. Gentleman, I am sorry to say that that looks like a very forlorn hope. It is for the right hon. Gentleman to give us that general sense of direction of the economy which has been so lacking over the last few years.

6.49 p.m.

Viscount Hinchingbrooke: I think that my right hon. and learned Friend the Chancellor of the Exchequer did well yesterday. I was in Africa for most of the Autumn, and for me this was his debut. At his positively next appearance, may he make the welkin ring.
The speech which my right hon. Friend treated the House to yesterday was a breezy, ebullient speech, and it blew to the four winds of heaven the rather turgid language that the Opposition have used in their Motion, as dark and terrifying as they try to prove the economy of the country to be:
That this House, expressing its deep concern at the present grave balance of payments position facing the country
and so on.
How the Opposition hanker for the old days. It is quite fascinating. Those endless speeches lasting one hour, one and a half hours, or two hours by Sir Stafford Cripps and Lord Dalton, and the present Leader of the Opposition, going meticulously into detail after

detail, correlating and co-ordinating all the White Papers issued in the past six months, and then during the last half hour of it the trenchant punch as rules and orders were laid on, controls elaborated, and all the apparatus of Socialism extended. And then the poor country waiting patiently for the inevitable disaster—fuel crises, devaluation, shortages and rationing, and all the rest whioh went on right to the end of the period when they ran away in ignominy. It has taken us all these nine years to undo the fell deeds they perpetrated.
They create a crisis to produce a planned Socialist solution to it, and my right hon. Friend was quite right to indicate to the House and to the country that in a sense there is no crisis of that order. There is nothing of the sort that we had in 1931 or in 1951. There is nothing so serious that dire measures are needed to deal with it. Indeed, what is the Bank Rate for but to attract foreign funds to this country and to stave off a balance of payments crisis. This has only developed in the last six months. It is by no means deep seated.
We do not know what the next six months will bring. What my right hon. Friend said yesterday was rather encouraging. It may be that the whole situation will be restored in the next year, the Bank Rate can then be reduced. Foreign hot money can flow quietly away and we shall be back on an even keel. I cannot understand why the Opposition should try to get the country into the acute state of alarm that they are trying to get it into today.
I was pleased at the shortness of my right hon. Friend's speech, because the length of Ministerial speeches is in direct proportion to their addiction to planning. The ideal would be if no Chancellor of the Exchequer made a speech to the country at all. We would then have a completely laissez-faire society with no Government rules and orders and no control. We would be in that happy state which the poor Russian Moujiks are only too anxious to get to; the time when the Government melts away and they can have what they like whether they refuse to work or whether they are unable to work.
I draw from the brevity of the speech we heard yesterday this conclusion, that


the Chancellor does not think that external fiscal measures, or strait jackets, or physical controls, or any of that sort of thing, are necessary to rectify the situation. He cannot anticipate the Budget statement, and if he thus acknowledges what many of us have tried to explain to the Government over the past year or two, and about which I shall say something in a few moments, that there is something lacking in our policy, some lack of opportunity, some shortage of idealism in society, then I think that the Budget represents an admirable occasion when he can rectify it.
I have not noticed in this debate much disposition for hon. Members to be little Chancellors of the Exchequer and to explain carefully to the Chancellor two months before the Budget what their solutions would be. That is perhaps an unattractive course for an hon. Member to take in a debate of this kind, and I will forbear to enumerate what I had hoped to put forward, if other people were going to do the same, as some of the things that might have been suggested.
I have never been one of those who wants to cut the standards of the Welfare State. Surely as a nation we glorify in the standards that we have obtained. What would our name be throughout the world if by Government retrenchment we seriously interfered with the high standards that we as a nation have conscientiously set up for so long?
Where I have always wanted the Government to curtail their activities and release consequential money to the taxpayer is in those aspects of society where the individual can take up any slack that is thus created. I am therefore pleased that my right hon. Friend the Minister of Health has introduced the changes that he has in the health service and done it for the reasons that he has given. I hope that this process will go on. It was a disappointment that only £65 million was called back in a full year. I would like to see something more than that.
I think that we might go on to education. About £100 million could be produced for the taxpayer if every family with a child at school paid five shillings a week, and who says that five shillings a week for a family in those circumstances is beyond its resources? Besides that I think the Government should

make a growing attack on housing subsidies, and on agricultural subsidies.
It is clear that we need a whole recasting of the tax structure. We need to move from direct to indirect taxation. We need to consolidate Income Tax and Surtax for persons with an upper limit of about 10s. or 11s., and the same on death duties. Those are the kinds of proposals which my right hon. Friend should initiate if this country is to seize the opportunity of moving out of the lax, introspective situation into which we have now come.
I propose briefly to address my concluding remarks to two topics. First, the state of the trade unions. Secondly, the lack of emotional appeal before the country.
The trade unions are now the greatest engines of inflation that exist in our society. Every other entity, private person, business group, or profession, is controlled as to the salary increase by some superior organisation or body. It may be that the State is his employer. If he is a man of independent means, he is controlled by the price mechanism and taxation of one sort and another. The trade unions alone are rogue elephants in our society. They are absolutely uncontrolled. Like the old-time, large, private, note-issuing banks, they create money out of nothing.
Let us take the case of the National Union of Agricultural Workers, which is supposed to initiate the cycle of wage claims. The Agricultural Wages Board consists of a farmer, a representative of the union, and an independent person. The claim comes in from the union. The farmer has his eye on the Price Review, which is annually increased to take care of rising costs in the industry. He looks from one to the other of his colleagues, half knowing that his situation will ultimately be taken care of by the State. The independent member, seeing the other two winking assent at each other, cannot stand out against them, and so the thing goes through—this year without the slightest justification in a rise in the cost of living. Every other union habitually takes its cue from the National Union of Agricultural Workers.
When the Government, in all their weakness, decide to appoint a learned


professor from Cambridge to inquire into railway wages, and that learned professor—not caring one jot or tittle for the interests of the ordinary taxpayer—recommends a substantial increase for railway workers, every other union which does not like seeing anybody jump the queue through Government assent to a professorial edict, immediately puts in its own wage claim so as to regain its former position in the hierarchy. That process still continues.
An enormous number of wage claims are in the queue to be dealt with in the coming year, which will be a very difficult one for our economy. What are the Government going to do about it? Will they allow those claims to go through? If they do, inflation is certain. The ordinary consumers and voters, who are not very much concerned with the machinery of wage negotiations, are getting heartily sick and tired of the whole process, and before long they will say—if they are not saying it now—that some form of control must be exercised over the ability of trade unions to put forward massive wage claims irrespective of the state of our economy.
There are two forms of control. The first is good, old-fashioned unemployment. I say "old-fashioned" advisedly, because, apart from its moral aspect, the British people are not prepared to wear the stark inefficiency of massive unemployment. I am sure that the country does not want inflation to return, and the trade unions are the ones who have promoted inflation since the war. Therefore, we will have to begin to think in terms of a new device, such as is applied to hire purchase and the control of bank credit, in order to regulate, in a period when the economy is very difficult, the amount of the annual increase in wages to be allowed to organised workers.
The Labour Party must find an answer. They must tell the country which choice it must make, and how the process should be conducted. People are not prepared to go through another ten, fifteen or twenty years of the kind of trade-union-sponsored wage increases that have taken place since the war.

Mr. Walter Monslow: Does not the noble Lord agree that when we have the graduated pension scheme there will be further demands for higher wages and salaries?

Viscount Hinchingbrooke: I dare say—and they will have to be dealt with by the Government in the light of a very tricky economic situation.

Mr. A. V. Hilton: I have listened with great interest to what the noble Lord has had to say about trade unions, and in particular about the National Union of Agricultural Workers and its methods of obtaining increased wages. I wonder whether the noble Lord or any other hon. Member opposite would like to work the same hours for the same wage as the British farm worker does. Incidentally, I wonder whether the noble Lord knows what the present minimum wage is for an agricultural worker. In case he does not, I will remind him that it is £8 9s. per week. I hazard a guess that he gets more than that each day.

Viscount Hinchingbrooke: The hon. Member complains that the agricultural worker is the lowest paid worker in society, and I am inclined to agree with him. There is a case for putting the agricultural worker in a higher place in the trade union hierarchy, but it must be a conscious decision which is arrived at and agreed as permanent. What I complain about is the slippery slope upon which we find ourselves every year, in which people refuse to take the fundamental decision as to what position in the hierarchy each trade union should occupy.
I now want to make a few remarks about what I conceive to be a lack of emotional appeal to our people. My hon. Friend the Member for Halifax (Mr. Maurice Macmillan) is quite right; there is no inspiring theme at work in the country today. Wherever we look, on any front—the home front, the foreign front or the colonial front—nothing is to be found which really elevates the consciousness of the British people. I trust that the Government will discover a key which will unlock this door within the next year or two. The honeymoon period between the Tory Party and the British people is over. From now on the Government are not going to be able to command success; they must deserve it.
It is not enough to give moral examples to the world, which is something so dear to the hearts of hon. and right hon. Gentlemen opposite. It is


not enough to put before the world a flaccid Conservative-Radical image, a "Butskell". Examples are not what is required; we need exertions. I see no sign, on any front, at home or abroad, that the Government, are going to lay before the country an inspiring theme.
I said at the beginning of my speech that I was in Africa for a part of the autumn. The situation there is fundamental; members of our Commonwealth in that great Continent desire to elevate their standard of living before anything else. The great majority of them are not worried at all about who is going to get into Government in the next six months. They want to take their feet out of that universal red clay and move into higher spheres of civilisation. In this country, we have to do something to bring that hope to realisation. We are not doing it at the present time. Every time we export £100 million or £200 million more capital to the Colonies it becomes part of the balance of payments crisis which right hon. and hon. Gentlemen immediately use as a reason for a vote of censure. The more good we do, the more we export, the worse it becomes. How fantastic that is.
People have cited President Kennedy's message of inspiration and hope to the people of the United States of America. If he had addressed the State of Washington, D.C. or Philadelphia and said that he hoped to double their standard of living in twenty-five years, what would the rest of his vast federated country have said in reply? What does the Commonwealth and Empire say to the Home Secretary when he speaks about doubling the British standard of living in twenty-five years? Is it a selfish and ignoble aim. It is not enough for a great country like ours with our opportunities. It is part of this isolated glasshouse complex which has come over us since the war. We have to think in bigger terms than that. Somehow we have to be able to export what we ourselves are building here to the Commonwealth in hundreds and perhaps thousands of millions of pounds with a million people as well if we are to save them from Communism and degradation and perpetual poverty. These things have to be done without causing a crisis in the balance of payments.
Could we, for example, invent a Commonwealth currency so that these transactions on a great scale can take place within the Commonwealth without causing any kind of economic disaster? That is the kind of device we have got to invent in the next five or ten years. I trust that my right hon. Friend the Prime Minister who has initiated many good ideas in the last four or five years since he took over the helm will think as big as he can about the future of this country and this empire and put before the people a theme and a purpose which will redound to the credit of our society.

7.12 p.m.

Mr. Roy Jenkins: The noble Lord the Member for Dorset, South (Viscount Hinching-brooke) has certainly returned from his autumn in Africa in very splendid rhetorical form. I thought that in the last few minutes of his speech he began to strike something of the note of idealism such as he told us earlier he was going to do throughout. But I think the noble Lord is extremely mistaken if he thinks that we can have an idealistic policy abroad accompanied by an extremely unidealistic and selfish policy here at home. As I understood him, when the noble Lord came to transfer his idealism and his emotional appeal into home affairs, what it amounted to was vicious cuts in the already inadequate education service in order to claw back money for the Surtax-payers. We cannot have this split between external and internal policy.
The noble Lord started—in rather a heterodox way—by congratulating the Chancellor of the Exchequer on his speech yesterday. As I understood it, there were only two points of substance in his congratulation. He thought the Chancellor made a good speech, first, because it was short and, secondly, because it was a speech marking a signficant stage on the road towards the withering away of the Government which he regarded as an objective which we should all have before us. It would indeed be difficult to quarrel with the latter part of the complaint, but I nevertheless think that the whole debate yesterday, in particular the speech of the Chancellor, was extremely depressing for the future economic prospects of this country.
I do not think that it was depressing primarily because the Chancellor made a bad speech, although the right hon. and learned Gentleman did make an extremely bad speech. But everybody can make a bad speech on occasions. What I thought was particularly depressing about the Chancellor's speech was not so much the unfelicity of its presentation but the lack of any real concern about what is the real problem facing the country at the present time. One could have forgiven the right hon. and learned Gentleman had he shown some worry about our difficulties, some desire to see what they are, and to face them.
What is the basic problem which we are, or should be, arguing about at the present time? It is perfectly simple; it is how we can get out of the vicious circle to which we have become so used. We are now in a situation in which we, unlike almost every other country, as soon as we have a brief period of expansion, run into a balance of payments difficulty. So our period of expansion can only be briefer than those of other countries; so our rate of growth is much slower; so our exports become steadily less competitive, and so the next time we have a period of expansion it has to be shorter still and we run into a balance of payments difficulty more quickly.
That is the difficulty out of which we have to break. It is no good, as the Economic Secretary to the Treasury said this afternoon, and it does not show an awareness of the problem, to say that we must push up exports before we can push up production. This is the very problem we have been facing. So long as we are not able to break out of the cage in which we have become prisoners we shall make no advance at all. I am not saying that this is an easy problem to solve. I do not think it is entirely a question of Treasury policy or of Government policy as a whole. I think that some of it stems from the deep-seated condition of inertia which seems to be developing in this country at the present time and which expresses itself in a general lack of adventure in the national life, in industry and in many other aspects.
I do not think that we can blame the Government overmuch for not solving this problem automatically and overnight. But what I think they can and

ought to be blamed for is pretending that the problem does not exist. This is the most dangerous thing the Government could possibly do and, of course, the whole keynote of the Government attitude as present, symbolised in particular by the Prime Minister himself, is constantly to encourage the country in an entirely misplaced sense of national complacency. To sink the country into a quagmire of complacency and to pretend that everything is all right is to delude us with illusions of national grandeur.
I would not accuse the Chancellor of deluding us with an illusion of national grandeur in his speech yesterday. I do not think that anyone who listened to him would have had his illusions of national amour propre stimulated by what the right hon. and learned Gentleman had to say. But in his own way the Chancellor follows the Prime Minister with a few little fumbling complacent details and pretends that because prices have been stable for a period, because last year was a so-called record year for production and because wages are at a so-called record level, everything is fundamentally all right.
Last year as a record year should no longer be taken as the basis for an argument. One has only to say, what is certainly the case, that last year was a record year from the point of view of exports in order to realise how false this is as a basis on which to base any general conclusion. Last year was a record year for exports and yet, as everyone knows, 1960 was extremely disappointing from this point of view and is a reason why we are in the middle of growing economic difficulties at the present time. One of the things we want from the Government is a moratorium on self-congratulation. In the past few years the Government have given the country a certain sluggish stability and a modest slow growing prosperity. They were paid for it, and overpaid, by their victory at the last election. Do not let the Government go on asking to be paid for that over and over again in the form of congratulations, particularly at a time when sluggishness is beginning increasingly to endanger the stability.
The position which faces us is not merely that if we go on as we are the rate of increase in our national wealth,


the rate of increase in our standard of living and in our ability 'to do all the things we want to do, will be much slower than that in other countries. Not only is that the case but it is becoming increasingly the case that we cannot even hold our present position because of the decline in competitive position which inevitably follows from this relative stagnation.
The starting point for the Chancellor ought to be, not to congratulate the Government on all things which are right but to look for what is wrong, and to try to find solutions for the difficulties for which none of us has yet found a complete solution. The only coherent argument which the Chancellor used yesterday was that of relating this problem to what happens in Western Germany and seeking to justify Government policy by showing that because Western Germany with an unplanned economy was so apparently successful an unsuccessful unplanned economy here must be right. It is possible to exaggerate the extent to which Western Germany is an unplanned economy. There is a great deal of Government intervention into the economy of Western Germany.
It is also a mistake to be too fascinated by and concentrated upon Western Germany in all these discussions as though the clear alternative was Western Germany, on the one hand, and Great Britain on the other, whereas it is essentially Great Britain, not Western Germany, which is the odd man out. A great many other countries, particularly in Western Eorope, are going much faster than we have been going.
There has been an increase in production in France very similar to that in Germany which has been largely achieved on the basis of a large determined public investment programme forced through with great ruthlessness and independently of the political situation and balance of payments and a whole range of other difficulties. The position which confronts us is that countries under all sorts of different Governments are achieving a degree of dynamism which we are completely incapable of achieving.
To turn to the Economic Secretary, of course we get slightly different results according to what base we take or whether we adjust for changes in the

labour force. But any set of figures, whatever base year is used, is unfavourable to this country and very favourable to almost all those other countries. There is only one other advanced industrial country which in recent years has been reasonably comparable with us and has stood with us in the stagnation queue and that is the United States. But look at the difference in attitude today. In the United States there is the attitude of self-criticism and here there is the attitude we have from the benches opposite.
The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) delivered a long and serious speech. We have not seen much of him since that speech. He went into great detail on various points of President Kennedy's speech yesterday. I think he succeeded in convincing us that if the hon. Member for Walsall, South had made President Kennedy's speech it would sound less dramatic, but I do not think he succeeded in convincing us that it meant the same as the speech of the Chancellor of the Exchequer yesterday afternoon.
There is one basic difference and that is that President Kennedy said that
economic progress at home is still the first requirement of economic strength abroad.
That is the reverse of what the Economic Secretary said this afternoon—that we must have economic strength abroad and have exports before we can achieve anything at home. President Kennedy was saying the reverse of that and the order of priorities has been turned round. The Americans are not going to be kept prisoners in that cage any longer because they believe that only by breaking out in the form of a far more rapidly progressing economy can they solve their balance of payments problems.
The evidence throughout the world is that the countries which have taken the risk and taken the adventurous course in this respect are those which have achieved a strong balance of payments position and a strong gold reserves position. Just as the Eisenhower Administration ran into a situation in which the United States not only failed to grow but for the first time for a generation found itself in balance of payments difficulties, so the Kennedy Administration with its newer vision will achieve a much more rapid rate of progress at home and a stronger gold


position than the United States has achieved recently. If we are to lift ourselves out of the position of remaining alone in this sluggish situation there must be very important changes in outlook here at home.
I think this means that to some extent on both sides of the House we must give up some of our cherished beliefs. I believe very much in what my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said about import controls. I think it likely that import controls were taken off rather too precipitately. But I do not believe that it can help us to solve our problems by going back in a restrictionist direction in this way. What this country needs is a much sharper wind of competition and we should do nothing to run counter to that. I also believe it would be highly undesirable to face other countries in a restrictionist direction. The Economic Secretary talked about our stationary population, and how that would remain the case. Looking round the world, I think there is a great deal of evidence that there are few things which stimulate growth in an economy more than an expanding population. On the whole, although there are difficulties involved, we should welcome a moderate degree of immigration to this country. That would have a stimulating effect, and it applies to immigration from Europe as well as from the Commonwealth. That would have a stimulating effect on our economy.
I want to talk a little about the position of capital. I still think it extraordinary the way in which the Government, when we are certainly suffering from lack of adequate capital, give every encouragement to capital to flow out of the country. There is an overwhelming case at present for looking again at the concession to O.T.Cs. given a few years ago. I also welcome capital coming to this country. In a position in which we so need capital in this country some of my hon. Friends should not be too xenophobic about capital coming into the country. Next, the Government must abandon their extremely foolish attitude towards planning, the sort of attitude symbolised by the nonsense in the speech of the Chancellor yesterday in which he devoted a great deal of puerile argument

which was supposed to be knocking down arguments which he obviously thought that my right hon. Friend the Member for Battersea, North (Mr. Jay) had put up, but which, in fact, he did not mention. Almost the whole of responsible business opinion has now moved to the left of the Government on the question of planning, yet in their public speeches and statements hon. Members opposite continue to adopt a completely untenable position.
Finally, as I have said on many occasions, I believe it would be highly desirable from the point of view of inducing a new spirit into our economy if we went into the European Community, and went into it quickly. What are the Government doing about that at present? We have been encouraged to believe that in the last year there has been a change in the Government's attitude. But we have not heard very much recently. The small amount of momentum which developed has since died down.
Do the Government believe that time is working on our side? There is not the slightest evidence that it is. If the Government have changed their attitude to any extent and are prepared to negotiate on a different basis, it must now be a basis of a Customs union. That is what saying that there has been a change in the Government's attitude means, that they would now be prepared to accept a Customs union. Can anyone doubt that, if they had been prepared to do so three years ago, the whole history of the negotiations would have been quite different and much easier from our point of view? In a situation in which we see the striking disadvantages of putting forward one's proposals too late, too reluctantly and with too ill a grace, it does not make sense to say, "Time is on our side. If we want to go into Europe, we shall wait until later".
Above all, more than any of these individual things, what I am convinced is absolutely necessary is a change of attitude, particularly on the part of the Treasury Bench, but to some extent on the part of the country as a whole. There must be a new sense of urgency, a belief that while things are not intolerable they are by no means such that we should feel complacent about them or able to congratulate ourselves upon them.
Are we to play our full part in the world and remain a major industrial Power, with our standard of living rising as fast as that of our neighbours and our ability to play our part in the rest of the world also increasing? I do not believe that there is the sharp distinction spoken of by the noble Lord between what we can do outside this country and what we can do inside it. I am sure that we are far more likely to adopt a civilised internationalist attitude and make our full contribution to helping other countries on the basis of a successful buoyant economy at home and a reasonably expanding standard of living at home than we are on the basis of a sagging economy at home and a standard of living which is stagnant or even falling, which is far more likely than anything else to produce an inward-looking mood of national sourness. If that is to be avoided there is little enough time before we must have a complete change of attitude on the part of the Chancellor of the Exchequer and the Government as a whole.

7.32 p.m.

Mr. Charles Fletcher-Cooke: I agree with the statement of the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) that it is on an efficient industrial base at home that exports will grow, but I do not think that he solved the problem of industrial growth any more than any other speaker did. In the debate, which is now coming gradually to a close, hon. Members have been trying to discover why, when we have a very high level of employment, investment, saving and consumption, with stable prices, we do not achieve automatically the rapid growth which all the books say we should have when we have all those desirable things.
I want to spend a few minutes, in as detached an atmosphere as possible, because I regard this as crucial to the debate and to the country, on inquiring why, in spite of all the things which the Front Bench has produced—they are not to be sneezed at in the way the Opposition have sneezed at them—we have not got the rate of growth which we all want. Why is it that, with all those four or five admirable ingredients, nevertheless the tree does not grow quite fast enough?
I have reached the conclusion very diffidently that the reason is that, of the high levels of which I have spoken, one

of them is more statistical than real. That is the high level of employment in so far as it affects skilled labour, upon which growth must be based.
We have read, on the one hand, that skilled labour is being hoarded by our great industries, that men are on a three, four or five-day week, not only in the motor industry but in the steel industry, and in the same newspaper we read that the Parliamentary Secretary to the Ministry of Labour, addressing the National Production Advisory Council, said that there are four vacancies for every one skilled man. That means that we are not using this rare, very valuable and vital asset as we should. If skilled labour is being hoarded to the extent that there are four vacancies for every applicant for a skilled job, but when they are in work they are in it on short time, something has gone wrong with one of the vital ingredients of a growth in the economy.
I do not think that the Government have done enough to induce employers to stop the hoarding process. I do not think that we can leave it to the ordinary process of the labour market any more. The reason why skilled labour is hoarded is that it is scarce. This is where, of all the speeches we have heard so far, the hon. Member for East Ham, North (Mr, Prentice) put his finger most nearly on the spot. Until we have a much wider pool of skilled labour, we shall never obtain the growth we need, because, on the one hand, the scarce labour will be hoarded and, on the other hand, the new industries—the new shoots from the branch of the tree—will have no labour upon which to call.
Therefore, the first essential is to ensure that the rather tentative steps towards group apprenticeship and the other means of industrial training put forward two years ago are driven through, because without that sense of urgency we shall not have the highly-skilled working population which a country needs. It is upon. the highly-skilled population that the unskilled almost directly depend.
Secondly, I suggest that it be made much more disagreeable for employers to hoard skilled labour. I should like to see, as I think is the case in many industrial countries, the employer's contribution to the weekly stamp made much higher and the employee's much less.
There is no doubt a good reason for it which I do not know, but I was rather surprised to learn that in the recent proposal to put 1s. on the weekly stamp the employer's contribution is to be only 2d. and the employee's 10d. I should have preferred a reversal of that position, because it is very important to bring it home to employers that it is expensive to hoard labour, that labour has to be made mobile, and that the new industries, which evidently need it as evidenced by the four vacancies to every applicant, are entitled to get it if they can. The reason they cannot get it is because it is being hoarded against a rainy day by employers, with the connivance and agreement—I do not blame them—of the unions and the skilled men.
The third thing which emerged from the meeting of the National Production Advisory Council was very helpful and hopeful. That was the suggestion of Mr. Lewis Wright, the leader of the textile workers, that the T.U.C. or individual trade unions or a joint undertaking between the trade unions and the Government should study more intensively than is at present being done the whole question of the psychology of the mobility of labour. Coming from Mr. Lewis Wright, that is a very important potential suggestion.
After all, we had great experience of the mobility of labour in the cotton trade in the last two years. I did not much care for the observations of the hon. Member for Newton (Mr. Lee) about the state of the cotton trade. He said that it was "a kept woman", or words to that effect. The difficult operation which has been performed in the cotton industry in the last two years, partly with Government help and partly by itself, has been a brilliant success and an example to the Government of how, although change is our ally, it must be given a little push.
If planning, of which we have heard in very general terms—or leadership, of which we have heard in even more general terms from my hon. Friend the Member for Halifax (Mr. Maurice Macmillan)—means anything, it is well exemplified by the Government's proposals of two years ago for the cotton industry, which have proved extremely fruitful largely because people have been moved about. Large industries

have been concentrated, premises have been released for other, newer industries, and the old industry is now in far better shape than it was. It is, indeed, extremely profitable and productive. That is because the Government planned it, and gave it a good push.
I have no doctrinaire objection to that, provided that the industry does not expect to be a "kept woman" for ever. The cotton operation, as the hon. Member for Newton (Mr. Lee) knows, is a "once-for-all" operation, and there is no suggestion—and there should be no suggestion—of a permanent subsidy. That would be quite wrong. That is why I echo all that my hon. Friend the Member for Preston, South (Mr. Green) said last night. He said that we cannot afford permanently to subsidise old and inefficient industries, however large the claims of constituency or other vested interests may be.
I hope that the Government will not do anything like that. We should give the necessary mobility of industry and of labour a good push with the inducements necessary—the cash inducements—to get the thing moving, as was done with the cotton industry. To do that on a once-for-all basis is quite right, and in that case has produced a greater mobility of labour, of industry and of skill than any other single example one can find.
Of all the different things that we can do to get a bit of growth on the economy—rather, to get a bit more growth because, in fairness, we must say that there is growth—the main one is to get skilled labour, which is so scarce, both greater in quantity and more mobile in quality. I suggest that the time has come when the Ministry of Labour should come off its perch a bit in this matter.
Successive Ministers of Labour have—and, no doubt, from their point of view, very wisely and, perhaps, in those days, necessarily—pretended that, somehow, they are not in the centre of the problem at all; that they are aloof, godlike, rather genial figures—a sort of super-conciliators in times of industrial strife, who come down like the god from the machine and. in a neutral position, settle the problem.
If that is so, it does not seem to me that the Minister should be in the Cabinet at all. It is not enough for


the Minister of Labour—-and here, of course, I do not speak personally but in the general concept of the function of Ministers of Labour—to be content nowadays with the weekly figures; to be able to show to the country and to this House that there is an enormous demand for skilled labour and that the employment figures are good—as, by and large, they certainly are.
In these days, he should be more concerned with the quality of the work and the position of the work as it is being done. He should be concerned with whether or not it is in the right place, even though the figures may show that it is all in employment. That may be the missing factor in our failure to grow, because it is upon the expansion and proper use of our skilled force rather than on any financial, fiscal or other gimmick that we will put out the new shoots that we need.
Throughout the debate, in some ways hovering as a sort of awful warning and in others as a paragon and an example, we have had held up the example of Germany. Germany, of course, has had an enormous influxion of refugees, and it is not wrong—and not, I think, fanciful—to suggest that there is a connection between the German ability to tap that expanding source of good workpeople—and often of skilled workpeople—and her prosperity. There are, of course, other reasons as well, but I believe that to be one of the main ones.
I believe that we must expand, either from without or within, our skilled and semi-skilled force in the same way. I was, therefore, glad that the hon. Member for Stechford was brave enough to say what he said. In the context of where he sits and the general trade union attitude to the import of skilled and semi-skilled labour it was a brave thing for him to say. I was so glad that he pinned that point and said that he supported it, because if we could get greater mobility of labour into the country there would not be four vacancies for every skilled applicant, but a nearer match, and a nearer opportunity for new industries to put forward the shoots upon which growth depends.

7.46 p.m.

Mr. Harold Davies: We have listened with interest to the speech of the hon. and learned Member for

Darwen (Mr. Fletcher-Cooke), the more so because his speech was succinct, to the point and short. I hope to be able to follow his example.
The hoarding of labour is very real. All of us meet it at different times in different parts of the country, and the suggestion that the employer might be discouraged from holding labour by having to pay a greater share of the National Insurance contribution might. in itself, be a worth while discipline to be considered. It is not necessarily something of a party nature at all.
The hon. and learned Gentleman spoke of the mobility of labour. Some constructive suggestions on that may come from both sides of the House, but it should be remembered that the human factor in the mobility of labour is the need for housing. How can we make labour mobile if we cannot find it the necessary housing? Here we have the vicious circle.
Again, in the life of the home, where a child has, perhaps, just won a scholarship to secondary school, grammar school or university, the wife is the dominating influence on the mobility of labour. A skilled craftsman may decide not to go to Birmingham, Glasgow or somewhere else where his skill is needed but prefer to take a lower-paid job, either because there is no housing available in the new place of employment or because of the difficulty there sometimes is in the transfer of children to schools with different standards of education and so on.
That is the vicious circle that proves our point about the need for constructive planning. Why is "planning" a dirty word? Planning has been part of our creed since the party was born and, in effect, it has been accepted more and more. We do not want any more silly epithets about it. Those parts of the world most successful in technological and scientific progress are those that have the courage—and I do not ask that it should be done in the ways of the dictatorships—to think ahead, and to plan their investment, their industry, their distribution and mobility of labour and their housing.
Industry, also, is a bit of a "kept woman". I have spoken on this on many occasions in this Chamber, and I coined the phrase that we live in a society where we socialise the losses and


privatise the profits. That is the "kept woman" aspect of industry today—demanding subsidies before getting on with the job. Cunard—the big industries—are now saying to the Government, "Industry is now of such a nature that we cannot do it ourselves." Private enterprise is falling down on the big jobs where we have to compete, so it all conies back to the taxpayer Both sides of the House know that to be true, yet no one has the courage to face it. Millions of pounds of the taxpayers' money have been thrown down the drain.
The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) seemed to have sprung straight out of the feudal system this evening. He was asking that people should pay 5s. a head for children to go to school. The hon. and learned Member for Darwen made a constructive speech with a great deal of which we should all agree because his desire, like ours, is to help the nation. The hon. and learned Gentleman says that we need more skilled workers. The noble Lord, from his feudalistic castle, says that people should pay 5s. to go to school. He asks that at the very moment when we have before us two reports on the machine-tool industry, the Mitchell Report and the Melman Report, which emphasise once again the parlous position in which the industry is.
I think it is worth spending a moment to consider what the Germans and other foreigners have done. We have heard a great deal about the Germans. I will mention others. The Report drawn up by the Mitchell Committee drew attention to the poor export record of British industry. During 1956–59, the German industry exported 51 per cent. of its machine-tool production and imported 8 per cent. The United Kingdom industry exported 29 per cent. and imported 23 per cent
I do not wish to bore an intelligent House of Commons with statistics. We have heard so many of them. and hon. and right hon. Members know where to find them. I will not read out masses of facts and figures. I shall try to interpret them. There is, however, one set of figures which should be mentioned this evening. Let us not forget that this expression "Five bob a nob" was first used in 1823 in this House.
The Mitchell Committee recognises that there is a shortage of qualified technical staff and that it is a weakness in our machine-tool industry. In 1958, ninety machine tool firms employing 30,000 people had a total of only twenty-five graduate engineers. Some German readers of the Economist were flatly incredulous when they first saw these figures. They were quoted in the Economist of 26th November, 1960. The Mitchell Committee considers that 250 to 300 additional qualified engineers and scientists must be attracted to the machine-tool industry.
At his psychological moment, the noble Lord makes his suggestion for the progress of British industry, that we should charge 5s. a head for children to go to school. Where is Britain going? Was that the heart of the Conservative Party speaking? Was that the real philosopy of Conservatism? In the latter part of his speech the noble Lord expressed sentiments which were rather noble. He said that it was his belief that it would be an ignoble objective to suggest that we should double our standard of life in the next twenty-five years without considering the under-privileged peoples of the world.

Mrs. Harriet Slater: Does not my right hon. Friend know that it is not just the feudal idea of the noble Lord that we should charge for education? The Bow Group, the supposedly thinking group of the Conservative Party, is now putting forward this thoroughly reactionary proposal.

Mr. Davies: I am grateful to my noble Friend—[Laughter.]—I have enough confidence in my hon. Friend to know that, no matter what might be offered to her, she will never be a "noble Lady" in that sense. She is, indeed, far nobler in her position outside the other place. The trouble is that some people in this country seem to lack a proper outlook on social justice.
Since 1958, the Government have wasted nearly £1,000 million on massive abandoned defence projects. That is just abandoned projects. Let us not argue at the moment about whether we want it or not: there is no planning at all. Projects completely abandoned account for £20 for every man, woman and child in the country. This is how £427 million was squandered last year and the year


before. There was £34,600,000 on the Swift fighter, which was no good, and the Government were told that it was no good. There was £80 million on the Victor II bomber, which was no good. There was £10 million on the Avro 730 bomber, and £58,100,000 on other abandoned planes. Then there was £105 million on Blue Streak, with a further £150 million on other missiles abandoned.
We cannot put down a Motion of censure on the Government without mentioning some of these figures. Whatever our attitude may be about neutralism, nuclear disarmament, and so forth, it is staggering that a debate of this kind should take place in the House while the Government admit to letting the public know that all that money has been thrown down the drain while they, on the other hand, want to collect from the sick, the injured, the poor and the aged £65 million for the Health Service. It is thoroughly disgusting. The Government are trying to collect £65 million at a time when they will have spent about £125 million in all by the end of the week on projects and objectives of one sort and another while, at the same time, they are still trying to meet the bill for those millions and millions which have been thrown down the drain.
I am purposely keeping away from statistics, because we have heard a great many and nobody has interpreted them. As I have said before, no one storms the Kingdom of Heaven with a slide rule or the differential calculus. We need to know how to use them. Whatever statistics are given about Britain being up or Britain being down, the first thing that stands out to a man with common sense is that we are living in what I call a "housey-housey" economy. It is a "big dipper" economy. People rush up to the top. There is a boom. They neurotically scream and say, "Thank God we are at the top." There is feverish activity on the Stock Exchange. There are take-over bids. Land values rocket. Everyone is happy just for a second or two. Then down they come and they scream again. Since this Government have been in power, we have had nothng but a big-dipper, housey-housey economy, with the Prime Minister and the Chancellor of the Exchequer, whoever they may be at the time, acting as masters of ceremonies. Ours is a specu-

lative kind of society, and the Government have not the courage to do anything about it.
I will give an example of what I mean. We must return to a courageous policy on land values. How can we expect British industry to be able to compete with foreigners when there is such wicked speculation in land? This is supposed to be a property-owning democracy. People are struggling to buy their houses at high rates of interest and with land values at fantastic levels.
I was invited to lunch at a certain hotel the other day and, as I had fifteen minutes to wait, I listened to six business men talking. I had better not mention the town; it is in the Midlands. The dialogue went like this. One said, "I nearly bought a piece of land for £7,000 the other day. I was damned annoyed. A pal of mine bought it for £9,000. Do you know what he did? The lucky fellow"—I will not use the actual word—"had sold it by Saturday for £12,000." In four or five days that man had made an enormous profit. There it is, the "society of social justice". It does not take brains to do that. It is sheer robbery. A man only needs friends on the county council to know the planning tricks and be able to sell land at high prices.
Something must be done about it. Are the Government prepared to do anything? We could save hundreds of millions of pounds for the taxpayer in twelve months. Nobody has mentioned that aspect of the matter. I regard it as one of the most necessary reforms in our society today that this vicious racket in land values and inflated prices should be stopped. It would then be possible for British industry to have a better chance. We will never be able to compete with Western Europe or with the Soviet and Far Eastern blocs unless this racket in land values is soon brought to an end.
I promised that I would not speak for too long. I have made my point. In this housey-housey economy the Government should be ashamed that they have not brought in legislation to check gambling with Britain's soil.

8.0 p.m.

Mr. Gerald Nabarro: The opening speech in this debate by the right hon. Member for Battersea, North (Mr. Jay) was characterised, in my view,


by not a single constructive proposal. He painted the drabbest possible picture of the national economy and sought to spread alarm and despondency, but not a single constructive proposal emerged from his 50 minute speech save only a proposal, not particularly constructive, that a capital gains tax should be imposed. I shall deal with that later.
The opening speech this afternoon of the hon. Member for Newton (Mr. Lee) was, perhaps, a little better than that of his right hon. Friend yesterday. He did. at least, have one or two sensible things to say about the employment of manpower and apprentice training schemes. There is no need for gloom and despondency about the condition of our economy today, but there is need for apprehension upon certain tendencies which have developed in the last few months. I am aware of the fact that my right hon. Friends the Chancellor of the Exchequer and the President of the Board of Trade are deeply conscious of those apprehensions, and I think that, generally, they will agree with what I have to say about the cause of them.
The reason why I feel that there is no need for gloom or despondency is that the figures for the last twelve or fifteen months in every field of our economic activity show a buoyancy and an expansion on earlier figures. I assess that the increase in production in 1960 over the year 1959 was approximately 4 per cent. That is not as much as I or any hon. Member would like it to be, but it was not a fall in production. It was an increase of 4 per cent. compared with 1959, which showed an abnormally large increase in the preceding year. Also, last year, exports increased by 6 per cent. and imports by 14 per cent. I shall have something to say about the abnormal flow of imports in a moment, but I do not regard an increase of 6 per cent. in our export trade in a single year compared with the year preceding as a bad performance, at all. If we maintain an increase of 6 per cent. in our export trade, in each of the next ten years, we shall be doing pretty well.
A third point which gives me a good deal of cause for confidence is the quite abnormal increase in the rate of personal savings. During the first nine months of 1960 about 9 per cent. of dis-

posable income went into personal savings. The comparative figure for 1951 was only 2 per cent. Even the most rabid Socialist opposite could not deny that represents a very healthy tendency, the more so because it underpins a critical consideration in our national economy, namely, the large increase in industrial investment. It is not possible to secure an increase in industrial investment without a high level of personal savings. The increase in industrial investment in 1960 compared with 1959 was about 19 per cent. It is said that this year there will be an increase of 30 per cent. Figures of that magnitude are far higher than we have ever achieved in the post-war years, and for hon. Members opposite to paint a gloomy and despondent picture of the state of affairs in 1960, I believe, belies the facts. These are the buoyant tendencies to which I wish to refer.
Now may I allude to the two features in our national economy which cause me considerable apprehension. The first is an adverse balance on visible trade of £881 million in the calendar year 1960, equal to £3½ million deficit per working day, assuming a 5-day week in industry, throughout 1960. That was a critical state of affairs. It is estimated that we shall have an overall deficit in 1960 of about £150 million. We shall not know the exact figure for a few weeks—it may be as high as £175 million—but for the first time since 1955 we shall be seriously in deficit overall.
Coupled with that, almost a concomitant of it, is a figure to which adequate attention has not been given in this debate. It was published by the Institute of Economic Research in January, 1961. It was assessed that £939 million was the abnormal inflow of funds, in the form of hot money and otherwise, into the United Kingdom in the calendar year 1960. I do not know how the Institute arrived at that figure, but it published it. I hope that the President of the Board of Trade—he has an hour before he replies—will turn up that statistic. It is represented that £939 million was the abnormal inflow of funds into this country in the year 1960. It is not an official figure, but if it is correct—and it has not been challenged—it is somewhat alarming contradistinction to our gold and dollar reserves


which at this moment stand at approximately £1,160 million.
I should like the President of the Board of Trade to tell us what is his Ministerial view on the proposal which has been made many times outside and once or twice inside the House that manipulation of the Bank Rate should in future be placed on a dual basis—one rate for external currency considerations to attract money from overseas, or otherwise, and one rate for internal or domestic considerations. I should like to know the disadvantages, from a Ministerial standpoint, of a system of that kind, because it seems to me that, if we must use the instrument of the Bank Rate for domestic counter-inflationary reasons it may have quite sensational results in the form of an abnormal inflow of currency from abroad in the sense I have indicated.

Sir William Robson Brown: That is exactly what President Kennedy suggested two days ago.

Mr. Nabarro: I am sorry, but I missed that valuable point. I am not asking for President Kennedy's opinion. I have no responsibility to President Kennedy. I am addressing myself to the responsible Ministers, the President of the Board of Trade and the Chancellor of the Exchequer, who are charged with the promotion of our export trade.
British exports are not in a particularly healthy condition at present. I am the first to recognise that. But I do not believe that the reason for that is a lack of dynamism among British businessmen and managements, as the hon. Member for Grimsby (Mr. Crosland) said so dogmatically yesterday. On the contrary, the British businessmen who roam the world today in search of orders in the face of the fiercest competition, generally know how to sell their goods and generally are at least as full of acumen, drive and capability as their American, West German, Japanese and French counterparts. Whether they are selling Kidderminster carpets, Stoke-on-Trent pottery, steel from South Wales or Scotland, or engineering or textile products, they know how to sell their goods.
Private enterprise exports must depend upon four major considerations: saleman-ship first, quality of goods second, com-

petitive prices third and prompt delivery, fourth. They are the four things that matter. The Chancellor of the Exchequer, however, cannot tell people how to do that, nor can the President of the Board of Trade. We do not live in a Communist society. Those men are doing their best, but they are trammelled with grave restrictions and circumscribed by many disincentives.
The words used by the hon. Member for Grimsby yesterday were very wide of the mark. This is what he said:
A great deal of nonsense is currently being talked—I regret to say, by an hon. Friend of mine on this side of the House as well—about the incidence of Surtax and about the vital effect it has on our export performance."—[OFFICIAL REPORT, 6th February, 1961; Vol 634, c. 65.]
I have never singled out Surtax as a single form of direct taxation as a major disincentive to export expansion. What I have said is that our penal level of direct taxation is a direct disincentive to a high and expanding level of exports. Direct taxation assessed on the individual means a combination of Income Tax and Surtax.
What admirable company I am in, when saying that. I said it in the Budget debate last year. Hon. Members will remember my contretemps with the Chancellor of the Exchequer on that occasion. I hope I shall not have to be as violent with his successor. I said on 5th April. 1960:
The fourth proposal should have been that the commencement level of Surtax be raised from £2,000 to £3,000, a bonus for brains.—[Interruption.]—
[Laughter.] That is a quotation from the OFFICIAL REPORT. It continued:
If the hon. Member for Brixton thinks that is funny, may I point out to him that if he looks up the number of scientists, technicians, teachers and doctors who left Britain in 1958 to seek their living in the Commonwealth and foreign countries, he will not find the figure very amusing."—[OFFICIAL REPORT. 5th April, 1960; Vol. 621, c. 308.] I had a lot of sympathy from this side of the House last year about the incidence of direot taxation and its influence on the export trade, but I have had a large number of recruits to this theme in the last few months. I start with the first of these notable recruits I quote from the Sunday Express of 22nd January:
Mr. Woodrow Wyatt, Labour M.P. for Bosworth, said yesterday: 'No one ought to pay Surtax unless he earns more than £6,000 a year.'


I said that the level should be raised from £2,000 to £3,000. The hon. Member for Bosworth (Mr. Wyatt) said that it should be raised from £2,000 to £6,000.
A week preceding that, there was a similar suggestion from none less than the Leader of the Opposition. I quote from the Guardian of 16th January:
Mr. Gaitskell repeated his call for a radical reform of the tax system at a Press conference before a meeting with party workers. He said that those who earned their money by capital profits from successful Stock Exchange speculation should be made to pay their fair share. A capital gains tax would bring in quite a lot of money. The Labour leader was repeating what he had said in a speech at Derby on Saturday night, when he was loudly interrupted and booed. The tax system was not related to the knd of incentive that should be given to expand production and exports.
That is exactly the same thing. [Interruption.] I will come presently to capital gains and will deal with all these matters in turn. Now, we have the hon. Member for Bosworth, the Leader of the Opposition—[HON. MEMBERS: "No."] Yes, I will deal with that presently.

Mr. Ellis Smith: How many more from this side of the House are there?

Mr. Nabarro: I am quoting two from each side to be fair. I am sorry, I have amused my right hon. Friend the President of the Board of Trade. He did me the kindness to come as my principal guest to the annual luncheon of the National Union of Manufacturers in Liverpool on 17th January last, when, as president of that august body, I received him. I quote from the speech of my right hon. Friend from the front page of the Daily Express of 18th January. As always, the Daily Express reported it graphically. Here are the words:
I think it is undeniable that high rates of taxation, particularly on those responsible for the direction and management of business, act as a discouragement to additional effort and risk-taking. It may well be that this is particularly true of venturing into new export markets.
My right hon. and learned Friend the Chancellor of the Exchequer, in his speech in Liverpool the preceding week—

Mr. Lee: Let this be a warning to him.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd): Mine was at a luncheon.

Mr. Nabarro: Would my right hon. and learned Friend care to intervene? As he says, what he said was at a luncheon, and he had been well wined, obviously, by his hosts. Of course, we wine him well on Merseyside. One expects that. My right hon. and learned Friend in a similar sense said that incentives were essential in this field of our activity.
I do not wish to go further on this theme for the moment, because I used these arguments last year. I am delighted to see that the hon. Member for Bosworth, the Leader of the Opposition, my right hon. Friend the President of the Board of Trade and my right hon. and learned Friend the Chancellor of the Exchequer have all—[An HON. MEMBER: "That is not fair."]

Mr. Charles Loughlin: The Leader of the Opposition did not mention Surtax.

Mr. Nabarro: —have all jumped on the Nabarro Surtax bandwaggon. There is room for more yet—I am still in the driving seat, and they will arrive before the next Budget. We are not full up yet.
I suffer from no inhibitions of any kind in a debate of this sort. My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) said that he was not sure whether he should express to my right hon. and learned Friend the Chancellor of the Exchequer what was hoped for in the Budget. I suffer from no inhibitions on 'that account. It is important that the Chancellor should he told now, several weeks before the Budget, and I defend absolutely the speech which he delivered to this House yesterday in opening the debate from this side. It was factual and objective.
Can anybody reasonably expect the Chancellor, eight weeks before 11th April next, which is Budget Day, to pronounce in advance how he proposes to deal with fiscal problems arising out of the criticisms made during this debate? Of course, he has his hands bound behind his back. He has behaved with the utmost propriety. I defend the speech he made yesterday. That does not prevent me, however, from telling him what he ought to do.

Mr. H. Hynd: Make the hon. Gentleman P.P.S.

Mr. Nabarro: I have stood in this market place eleven years. I do not propose to move to the bench above.
I say seriously to my right hon. and learned Friend the Chancellor that this is not only a matter of tax reduction. It is also a matter of drastic tax reform. The complexity of our taxation is a brake upon all industrial and commercial endeavour and expansion. So complex has our tax system become that even those versed in the Statutes and rules affecting taxation are unable any longer to work out their own taxation liability. I cannot. Even the most rabid Socialist would not accuse me of being backward in coming forward to secure such tax reliefs as I may be entitled to, but I cannot do my own tax papers. I have to employ an accountant to do them, so complicated is the assessment put upon me under Income Tax, Schedule A, Schedule B, Schedule D, Schedule E and Surtax all simultaneously. The hon. Member says "lucky man". Oh, no. Schedule A is assessed on the house I own and live in. There is surely no harm in my owning a house. Schedule B is the occupation of land for non-profit-making purposes in the form of my garden at home. Schedule D is my assessment before—

Mr. W. A. Wilkins: What about Schedule C?

Mr. Nabarro: A private individual cannot be assessed under Schedule C.
My Schedule D assessment is for radio and television broadcasts fees, Press articles, etc. Schedule E is my assessment of income as a company director. I am assessed under four Income Tax Schedules and Surtax at the same time. Of course, I cannot work out what my liability to tax is. It is exactly the same with companies, so complex is the tax system.
May I, in this respect, quote from the Financial Times leading editorial of 4th January this year:
It is impossible to prove that high marginal tax rates weaken initiative, but there is no doubt that many people, both here and in the United States, are convinced that they do so.
It continues:
It is conceivable—the history of the duty on wine is an encouraging example—that almost any change Which induces persons and

companies to increase their incomes would increase the yield. But there are two angles from which the problem can be attacked cautiously. The first begins, with the fact that the present tax structure is too complicated.
The Sunday Times of 22nd January carried an interesting article by the City Editor entitled, "Will the Budget Go the Whole Hog", on exactly the same theme:
The present structure of British direct taxation is cumbrous, obsolete, excessive and unfair: if the Chancellor takes a hatchet to it he will deserve all the thanks; if he takes a penknife to it he will be thanked by nobody.
I could quote another dozen examples of that kind from the financial and economic Press, all making the same point. I am pleading for modest not massive tax reductions; I am pleading for drastic tax reform and simplification, because the very fact that corporations and individuals find the tax structure so complicated as to be unable to work out their own individual or corporate assessments is in itself a positive disincentive and deterrent to expansion of our economy and improvement of our exports trade and facilities. This is an opportunity—two months before the Budget—to say to the Chancellor exactly what I want him to do in the field of tax reform. I am not ashamed to be joined in this matter with the right hon. Member for Huyton (Mr. H. Wilson). I am not sure that he will be ashamed either, because it has respectable precedents, and at least he knows more about taxation than many of his hon. Friends.
The first step must be to separate corporation tax from personal taxation in order that rates of business taxation as distinct from personal taxation may be manipulated to meet the needs of the contemporary economic climate.
The second step is a total amalgamation on a graduated scale of personal taxation, that is Income Tax and Surtax. Here the right hon. Gentleman the Member for Huyton and I will probably part company, but it has a lot to commend it, as the right hon. Gentleman may agree, in certain circumstances. The third proposal is in regard to corporation taxes. There should no longer be separate Income Tax and Profits Tax and capital allowances. I would abolish the Profits Tax absolutely and the £200 million it raises. In order to save an equivalent sum of money, I would scrap


the whole of the capital allowances involving investment allowances and initial allowances, which are now obsolete.
What the Treasury is doing at present is paying out £200 million annually in capital allowances on industrial plant and equipment on the one hand and collecting £200 million on the other hand, from Profits Tax. I hope my right hon. Friend will come along with me in this respect. If we take the example of a company executive who buys a Rolls-Royce motor car for £6,000. The company receives an initial allowance of 20 per cent., and depreciation on the first year of 25 per cent., making a total of 45 per cent. which can be charged against the £6,000 vehicle in respect of taxation in the year of purchase. Is that helping exports or expansion of our national production? Of course it is not. That sort of thing is a deterrent.
These are the three suggestions. The first is the separation of corporation tax from personal taxation; the second a single graduated scale of personal taxation as an amalgam of Income Tax and Surtax; the third to eliminate the Profits Tax and the capital allowances with it.
My fourth suggestion deals with indirect taxation. I am sorry, did my right hon. Friend the Minister of State wish to intervene?

The Minister of State, Board of Trade (Mr. F. J. Enroll): I was merely thinking that on a corporation tax I would have to pay a great deal.

Mr. Nabarro: I was not aware that the Minister of State was a corporation. He may have a corporation, but he is not a corporation. I am sorry, I could not resist that pun, Mr. Deputy-Speaker.
The fourth tax reform which I urgently desire relates to Purchase Tax—and I say this to my right hon. Friend after very careful thought. Surely a highly discriminatory system of indirect taxation in the form of Purchase Tax, which seeks to classify certain consumer goods as luxurious, semi-luxurious and non-luxurious, is quite obsolescent. It belongs only to the period of the war and scarcities which followed the war. In an affluent society, and particularly an

expanding economy, there is no such thing as a luxury. For the Chancellor of the Exchequer to seek to support a system whereby, for example, a transistor radio set—of which there are now millions in use—is ten times as luxurious, from the point of view of Purchase Tax, which is at 50 per cent., as a 400-guinea cocktail cabinet, the Purchase Tax on which is 5 per cent., is absolute nonsense. How can the Chancellor of the Exchequer justify a television set, with Purchase Tax at 50 per cent., as twice as luxurious as an electric fire or any other electrical appliances, on which the Purchase Tax is 25 per cent.?
How can the Chancellor of the Exchequer justify cosmetics, such as a lipstick, used by 20 million or more women in this country, being judged approximately four times as luxurious as a carpet, which everybody seeks to have in his home to cover the floor, or linoleum, or wallpaper taxed at 12½ per cent.? Who decides these rates anyway? Who has decided that a motor car should be 50 per cent. Purchase-Taxed, a cosmetic should be 50 per cent. taxed, a radio 50 per cent. taxed, a television 50 per cent. taxed, all electrical appliances 25 per cent. taxed, floor coverings 12½ per cent. taxed, pottery 12½ per cent. taxed, wall coverings 12½ per cent., clothes 5 par cent., and furniture 5 per cent. taxed? Who decides all these different rates on different products and for what reason?

Mr. Monslow: A Tory Government.

Mr. Nabarro: All I would reply to the hon. Member is that they were about three times as bad under the Labour Government. So we have made a little progress in the matter.
Last year many people thought that I was a voice crying alone in the wilderness in this matter, though I had a good deal of sympathy. Now I have powerful support. In "The Future of Purchase Tax", published a fortnight ago, Professor A. R. Prest, a don at Cambridge, repeated what I have been striving for in the last few years. He is briefly reported in the Daily Herald, which I quote for the benefit of Socialists opposite, on 23rd January under the heading "Scrap all Purchase Tax" as follows:
Purchase tax should be scrapped because it is out-of-date and unfair. This demand comes this morning from Dr. Alan Richmond


Prest, the Cambridge economist. He claims the tax 'distorts consumer choice, disrupts efficient industries and restricts competition.' And it is so arbitrary in its effect that it is almost a music hall joke, he adds. Dr. Prest, Bursar of Christ College, says that the tax is too high, imposed on too few goods, and is changed too often.
I assure my right hon. and learned Friend the Chancellor that I did not write those words for Dr. Prest. He had, of course, the benefit of the guidance of the 300 Parliamentary Questions which I had tabled and had had answered over the preceding three years. That was a valuable brief.
I repeat that I desire a single rate of indirect taxation applicable to all consumer goods covered by the present Schedules. It should be non-discriminatory in character. There is no such thing as a luxury in an affluent society and in an expanding economy. The Chancellor need not lose revenue greatly if he follows the advice I have given him under these four heads, but any reduction that he can make in his forthcoming Budget, subject to these reforms, should be applied at the points where they will give the greatest incentive to the expansion of our exports and the growth of our national well-being.
My final words are that production, growth, taxation reform and reduction, incentives for savings, and investment, are all indispensible concomitants of an increased export trade.

8.35 p.m.

Mr. Ellis Smith: On behalf of thousands who are engaged in our greatest export trade I want to raise a matter of extreme urgency and to express regret that it has not yet been mentioned in the debate. In doing this I want to appeal to the Prime Minister, the Chancellor of the Exchequer, the President of the Board of Trade and the Postmaster-General.
One of the most modern and efficient electrical concerns not only in this country but in the world had been looking forward up to last week to receiving a large order from India. Last week this concern was told why it was not going to receive the order, for reasons which I shall not repeat because I do not want to be responsible for one damaging word in the same way as those who have been responsible for such words and of whom I shall complain later. Last week this

large modern electrical concern was told that the order was going to France, and it was given the reasons why.
Colossal damage has been done to our export trade by the irresponsible craze for the dramatising of news on the part of television and the Press in this country. While not condoning any mistakes that have been made in calculations, or in the designs based upon these calculations, in building those electrical trains for Scotland, I deprecate what the sensational Press did and the broadcasting of reports about this matter throughout the world. Those who belong to the thousands who have invested their lives in the export industry, who were trained to apply mathematics and geometry and to work to drawings, know how easy it is to make a mistake.
I have made mistakes, and I learned in my experience that most real men are decent about it and assist and cooperate in making up for mistakes. Writing is so easy, and so is talk. But when one is responsible for the construction of large-scale power plants, or of electrical apparatus, based upon years of experience and mathematical and geometrical calculations, then that is quite a different matter and mistakes can be made.
I suggest that explanations of how the mistake was made should be broadcast as soon as possible, and the world reminded that the men engaged in these large power plants have been manufacturing the most efficient electrical apparatus for the past fifty years, exporting their products all over the world. We have co-operated in most parts of the world in the electrification of internal power plants and railway concerns. We have carried out large-scale orders for America, Africa, Europe, Russia, China and India.
I suggest that, in order to undo some of the damage that has been done, the Prime Minister, the President of the Board of Trade and the Postmaster-General should consult the chairmen of Associated Electrical Industries, Ltd., the English Electric Company, Ltd., and the General Electric Co., Ltd., as soon as possible in order to consider the colossal damage done by the irresponsible people who have been talking about them.
While sitting here and listening to the debate my mind went back to twenty-one years ago. Only three Members present in the House at the moment were Members of the House then. They will remember that this country was then looked upon by the world as being almost completely knocked out. On the other side of the Channel was standing the greatest military machine ever built up to that time.
Because of the terrible position we were in, we had to dispose of all our assets in America—Courtaulds and others. I remind the Americans—and some English people need to be reminded as well—that we had to dispose of our assets at a value placed on them because we were in that terrible position and so that we could equip our defences and purchase the necessary material—aluminium and other metal—from America. The Americans charged us exorbitant prices.
It is because I have been thinking against that background that I stand here and say that during the past twenty-one years this country has been responsible for a miraculous achievement, upon which we should look back with pride. The position that we have reached is remarkable when, in considering our future eoonomic progress, we remember the work carried out by industry and all engaged in construction in this country since the end of the war.
It is because I hold strong views, from which I have never deviated—unlike others who have retreated from positions which have since proved to be correct—that I speak with such confidence, believing that our basic ideas of life are correct and are increasingly shown to be correct. Not for a moment do I ask the Chancellor of the Exchequer to accept my views, but he should be prepared to compromise.
With the notable exception of this country, almost every industrial country is undertaking some form of economic planning. I have some reservations about those who did not undertake the planning which should have been performed when Labour was in power. I know who was responsible for preventing planning as I would have liked it at that time. Fortunately, I have never looked upon such people as my close friends.
They were conscientious and acted correctly from their point of view, and I make no complaint of their conduct. But some of us cannot forget who prevented the Labour Government in 1945 and 1946 from carrying through their basic policy of planning. People who held my view have since been proved correct, while the others have gone to another place. If the Government are to be worthy of the enormous achievement of our people, they must adopt some form of planning so that even greater results can be achieved by industry.
Economic development throughout the world is showing the need for planning. In 1944, the Trades Union Congress produced constructive proposals in one of the finest documents of its kind ever to be published. Some of us tried to apply the policy then advocated, and I am still convinced that had we been successful the country's economic position today would be far stronger. Our views have since been completely confirmed. In the non-political publication, "Growth in the British Economy", the result of three years' study of our economic position by a non-political organisation called Political and Economic Planning, the economic policies of all Governments since 1945 are condemned, but the T.U.C. policy which I have mentioned is completely confirmed.
The Federation of British Industries is now seeking some form of economic planning. That is a step in the right direction, but I sound the warning that the Federation wants the State to plan with it in the interests of big business, whereas my hon. Friends and I want the State to plan for the benefit of the State, putting the interests of the State above all else.
The time has come for the abolition or drastic cutting down of the number of Ministries. With the large-scale nationalisation of the last fifteen years, we no longer require large numbers of people in London engaged in different Ministries dealing with nationalised industries. I believe that the time has arrived when a Ministry of Production and Economic Planning should be set up to deal not only with our immediate problems but to lay the foundations for dealing with future economic problems.
This party brought out from isolation the greatest political genius and political


giant of our day and put him in the position of Prime Minister when the Conservatives had kept him in isolation. It was this party which brought him out of isolation. If this party was worthy unto itself, and worthy of its past, it would take the initiative in dealing with problems of this character and in providing a dynamic policy that would enable us to deal with our economic problems in the way in which we dealt with the military situation in 1940.
I believe that we should advocate the formation of a Ministry of Production and Economic Planning. Supporting this Ministry there should be a small economic general staff. There are military general staffs in London, at Fontaine-bleau, and other places, and the Ministry which I have suggested should be officered by an economic general staff. Included in this Ministry there should be a national investment board which would act in co-operation with a resurrected British Commercial Trading Corporation. During the last year that Corporation did a great job. Too many people forget what we owe it.
I once had an argument with probably the greatest legal giant of our time. I admit that I had to bow to the legal interpretation of Clause 7 of the American Loan Agreement, but, on looking back, I am convinced that we ought to have ignored the American interpretation of that Clause. We ought to have insisted on the British Commercial Trading Corporation being carried on. Had we done so, we would now be in a much better position to deal with our balance of payments problems.
It may not come in my time, but at some stage, because of our geographical position and our responsibility to 50 million people to maintain our relatively high standard of living, we shall have to embark upon a policy of the kind that I am suggesting. It is therefore with complete confidence that I make my suggestion.
Because of the policies of our postwar Governments we have less central influence over our economic affairs than most other industrial countries in the world. This is serious. I am not making a political point, but I repeat that we have reached the position where one of the greatest industrial countries of the world has less central influence over its

economic affairs than most other industrial countries. At the same time, the organised vested interests have more control than in any other industrial country in the world, including America. In spite of the fluctuations, we continue to keep going relatively well. This is due mainly to the rebuilt strength and high skill of the people in industry who are serving the country so well. In relation to many other countries we are losing ground. A fundamental change is required in order that we can hold our own in the world of the future.
I should like replies to some questions. Why have the prices of commodities not been reduced in relation to world prices? Why have the internal prices of imports not been reduced in relation to the internal prices in the countries of origin? Why are the prices of raw materials so high for the manufacturing export industries? Why has the cost of living in this country not been reduced during the past ten years as it has in most other countries? Why has the cost of living not been reduced in relation to world prices and the prices in the primary producing countries, and why did the Government allow a continuous increase in the overhead charges of the export industries?
I should have liked to say much more and to have made some constructive proposals, but I promised to finish by about ten minutes to nine, and I now do so.

8.51 p.m.

Mr. Harold Wilson: I should like to thank my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) not only for his courtesy but also for the speech to which we have just listened. Over the last two days the debate has been made memorable by a number of speeches from hon. Members on both sides of the House, and I cannot refer to them all. I want to pay tribute, however, to the hon. and gallant Member for Carshalton (Captain W. Elliot) who made his maiden speech yesterday and rightly earned the praise of hon Members on both sides.
Yesterday's debate was also made memorable by the speech of the hon. Member for Halifax (Mr. Maurice Macmillan). Today it has been made memorable by the speech of that noble survival, the hon. Member for Dorset, South (Viscount Hinchingbrooke), among


others. The first part of the noble Lord's speech showed the House and the country what the more atavistic of the Conservatives are thinking, but his concluding words utterly redeemed everything he had said previously, in that they contained one of the most utterly moving and noble statements of the case for helping the under-developed areas. I see that the noble Lord has now entered the Chamber. I am sure that the whole House was deeply moved by his concluding words.
The debate has re-emphasised the fact that the centre of the economic problem is our export-import gap. I shall not repeat the figures and the analyses which my right hon. Friend put before the House; I merely want to hammer home one or two of the more salient of them. Compared with 1959, which was itself a bad year, exports rose by 6 per cent. and imports by 14 per cent., and the gap was widening towards the end of the year.
Chancellor after Chancellor has said that our balance of payments surplus must be not less than £450 million a year if we are to meet our obligations in terms of private investments and aid to under-developed areas. Far from reaching that target, we had only a £139 million surplus in 1959, and a very serious deficit last year, getting on for about £200 million on current account. In fact, our 1960 showing—and the Chancellor showed little awareness of this—was between £600 million and £650 million short of the target which every Chancellor has said we must achieve.
This worsening was partly due to our shocking showing on visible trade. It was the worst since the Korean War period. I hope that nobody will try to burke that fact. But there has also been a serious worsening on the invisible account. We have the figures for only the first three-quarters of last year, but for that period invisible earnings worsened by £100 million, oil earnings were down, and there were far greater payments across the exchanges because of the high Bank Rate on borrowed money, and an alarming increase in net military expenditure abroad, which last year was running at £100 million more than three years ago.
The drain on the exchanges was equal to the whole of our exports of woollen and worsted goods or three times our exports

of machine tools—all swallowed up in this increasing drain from higher military expenditure abroad. I hope that we shall be told something about that. Yet all the Chancellor could say yesterday about the balance of payments was that our gold reserves had just about staggered up to the 1951 level. He did not say it in those terms, but that was what he meant. Last year they rose by £177 million, even though he had paid back as Chancellor some of the American loans he raised as Foreign Secretary in order to pay for Suez.
What happened was that the balance of payments deficit at £200 million last year, plus the current new long-term investments, were covered and our reserves increased by one means only—we borrowed, and borrowed heavily. We borrowed on short-term hot money from the financiers of the world—vulnerable money, easy-come-easy-go money, lured here by virtually the highest interest rates in the world. The position is that hard-pressed local authorities in this country are asked to bear heavy burdens. Owner-occupiers have to bear a heavy mortgage charge. Industry has to bear fantastic prior charges and the National Debt charge—which has to be borne by the taxpayer—for the first ten months of the financial year has so far been £56 million up on the same period of last year. In fact, when we look at the economies we are asked to agree to by the Minister of Health, they just about balance the increased amount the taxpayer has to pay in higher interest rates because of the Government's financial policy. All these burdens are the price of an economic policy now utterly dependent on short-term borrowing abroad to the tune of some £900 million, in 1960—fifteen years after the war.
I do not need to warn the House of the dangers of borrowing short and lending long. Were he present I should not have to warn the Minister of Aviation about how quickly short-term capital can take wing and involve us in catastrophe, because the right hon. Gentleman would remember 1957. Yet in 1957 the volume of hot money was far less than today and our export-import situation was far better than today.
I think that the whole House will agree that the urgent priority is to increase exports, and I hope that the Government will not forget our repeated


warnings on this question; how year after year we pressed for higher investment to strengthen our competitive position; how before and after the election we warned them that a consumer boom aimed at electoral popularity would strangle our export drive; how in 1959 in the debate on the Queen's Speech the President of the Board of Trade, like the grasshopper in the Aesop fable—rather an overgrown Ministerial grasshopper, we grant him—scorned our warnings as he disported himself in the sunshine of a hire-purchase boom, and laughed at our suggestions that the economy would be so overloaded by the hire-purchase boom that there would be no room for extra exports and investment. The President is singing a very different tune today, and well they all may.
Look at our comparative export record. In 1959 we were still lagging behind our trade rivals. It was not a very good year. Yet in the first nine months of 1960, while the world trade had increased by 18 per cent.—Germany and the United States increased their exports by 18 per cent., France increased hers by 28 per cent. and Italy by 48 per cent.—ours had increased by 6 per cent. Our share of the world trade in manufactured goods, which was 25½ per cent. in 1950 and which had fallen to 19·6 per cent. in 1955, and to 17·3 per cent. in 1959, fell last year at an accelerated rate from the 17·3 per cent. in 1959 to 15·4 per cent. by the third quarter of 1960. Ten years ago we were the pacemakers of Europe, today we lag behind in shame.
Look at our trade with particular areas and figures of our direct trade with the United States. In 1959 we had a visible trade surplus of £11 million. Last year we had a deficit on Anglo-American trade of £227 million, a worsening of £238 million on the trade between this country and the United States. Exports were badly down as we know, but imports were also spectacularly high.
Look at the position of individual industries. Cotton and textiles are now, of course, a heavy net importer. Shipbuilding is a net importer. Machine tools are only just in surplus; we are only just exporting rather more than we import in the machine-tool industry Undoubtedly, there are strong criticisms

to levy at some of our exporters, not enough effort, in some out-dated methods, deliveries too long and not on promised time, problems of servicing and spares, but the main fault lies with the Government who sacrificed the export drive to Tory freedom when they abandoned planning and sacrificed to electoral popularity when they unleashed the hire-purchase boom in 1959.
I ask hon. Members opposite, how can export-minded managers and directors concentrate on the difficult tasks of grasping export opportunities when all the time they are looking over their shoulders to see which take-over grabber is to move in with take-over graps motivated, not by export considerations, but by quick tax-free capital gains or some devious manoeuvre of property exploitation? How can export-minded boards of directors cut their export costs or plough profits back into productive investment when the fear of a take-over bid forces them into the payment of uneconomic dividends to speculative shareholders who are only too ready to listen to the offers of the take-over tycoons?
Today we are all agreed on the need to increase exports. That cannot be done easily or quickly. The rot has entered far too quickly into the economic life in the last few years. There are things which the Government can do. I referred today to our fourteen-month-old proposals for increasing international liquidity, now receiving such powerful support at home and abroad, and our proposal for increasing capital goods.
Look at the Government record. First, we have had the Prime Minister with his bad joke, badly received, about exporting being "fun". We are now getting a spate of speeches from the Chancellor and the Board of Trade Ministers. The Minister most active in export markets is the Minister of Aviation, the bagman of the guided weapons industry, peddling Blue Streak with indifferent success around the capitals of the Western world. While I am on him, although I am sorry he is not here, I will refer to responsibility for the deal between Messer-schmidt and Hawker-Siddeley, a deal which is carrying very serious historical overtones for this country.
Our exports of arms and munitions are, of course, booming, but I think we all agree that the future of this country lies


in exporting the munitions of life to underdeveloped nations—nations which, as the noble Lord reminded us, have lived in darkness throughout the centuries—not in earning foreign exchange by shipping the instruments of death to Germany, the Middle East or Central America. None of us can be happy about seeing so high a proportion of export trade dependent on that kind of traffic.
I turn to the internal situation. The main fact here, as hon. Members have repeated, is the stagnation shown by the fact that over the greater part of 1960 industrial production stood still. In November, the latest figures we have, production fell. Once again they have proved that under their governance we can expand only for a short time. Then a balance of payments crisis is upon us and the shutters go up—credit squeeze, wages freeze, higher taxes, social service cuts, a tight hold on investment in the publicly-owned industries and the rest.
We are bound to ask whether under the Tories we are so short of wind, so flabby of muscle, so rheumaticky in the joints as a nation, that after one short burst of expansion, one brief attempt to keep up with our neighbours in Western Europe, we fall exhausted by the wayside. This seems to be the lesson we have to learn from so many years of Tory rule. This is our central problem on the home front—the problem of the lost dynamic in British industry.
Once again I ask hon. Gentlemen, as I have asked them before, reviewing the last ten years, to name any country which in production has done worse than Britain under the Conservatives. There are a hundred Tory Members present at the moment. I will help them and name two countries. One is Belgium. Are they proud of that? The second is Eisenhower's America. Now in America, under a new and youthful President, they are flexing their muscles once again. They are looking to new frontiers, while this tired, discredited, caste-ridden Government, boasting of nothing but a certain amount of Edwardian elegance—I grant them that—and rather questionable family appointments, allow Britain to lag behind.
Where do they think it will lead? Where do they think it will lead when Britain over the years achieves an average industrial expansion of 2 per cent.
and Germany has one of 10 per cent.? Where do they think this will lead as years succeed years?
This is not the whole pattern. Look at the distribution of the profits of industry. Last year wage rates rose by 4½ per cent., and that is causing apoplectic attacks to many right hon. and hon. Gentlemen above and below the Gangway. But profits rose by 14½ per cent. We have not heard that fact mentioned. Dividends rose by 33 per cent. I say nothing of unearned tax-free capital gains.
Let us consider the state of the gilt-edged market, which hon. Gentlemen opposite used to be concerned about and which was once regarded as the test of the national credit. Today it is almost at an all-time low. Suppose an investor were moved by the Home Secretary's eloquent speech at the Conservative Party Conference in 1954—the "Invest in Success" speech—to put £1,000 into gilt-edged at that time. Today his investment stands at £690 or, allowing for the fall in the value of money, £600, while his neighbour, who invested in an average packet of equities, would today have £2,170—that is a tax-free gain of 117 per cent.—or he would have just under £1,900 allowing for the rise in prices. If he had gone into property shares, steel shares or land he would have done far better, and the whole gain would still have been tax free.
The Government are responsible for the slump in gilt-edged securities, not only by their high interest rate policy, but by their immoral decision to sell publicly-owned steel prior charge stock to private holders. It is calculated that their activities in this connection will be enough to cause a four points fall in Consols or War Loan.
In the face of all this, what are the Government doing, apart from busily selling steel shares to their friends at a loss borne by the taxpayer? Of course, we have a new Chancellor of the Exchequer. A few weeks ago the Sunday Times said this about him. It gave him a wonderful write-up. I hope that he was duly moved by it. The Sunday Times said:
In all the fuss and excitement about the state of the economy the Chancellor has maintained an Olympian silence: he has neither


threatened nor cajoled, nor has he read any Treasury homilies on what we should do with our own money. He has deliberately kept his own counsel until he has completed his factfinding … his main concern is to break the cycle of squeeze and ease and find an alternative to reliance on monetary controls alone.
In other words, he has not a clue.
If there were any doubts about that, they were answered by the right hon. and learned Gentleman's speech yesterday. Faced with a very grim economic situation we hoped, in the words of the sergeant-major to the young officer when the troops were marching over the cliff edge, that he would say something, if only "Goodbye". We did not even get that. I think that the kindest thing I can say about the Chancellor's speech yesterday—paraphrasing the remarks of my hon. Friend—is that he set up a row of Aunt Sallies and then proceeded to get knocked down by them.
He gave us every cliche in the book—not forgetting even Scylla and Charybdis, those overworked standbys of cancellarian peroration—and when the occasion needed the inspiration of a Crippsian call to national selfless action, all we got was the prosaic flatness of a Foreign Office communiqué.
But, of course, he did tell us this: he is setting up a committee to see what is involved in raising production by 3 per cent. per annum. This is fine—we applaud it. After ten years the Government have set up a committee—a committee to see how we can raise production by 3 per cent. per annum. Of course, if by the end of the day that committee reports that what is involved is a whole series of policies that cut across their doctrinaire Tory Party views, the report will be treated with the same cavalier discourtesy as was the Radcliffe Report some time ago.
I want, however, to be fair to the Chancellor—I will even go so far as to apologise to him. I must confess that I was wrong when I forecast last summer that he was to get a Department of his own. That just has not happened; he is just as much the Sorcerer's Apprentice as when he was at the Foreign Office. As if the economic outlook were not black enough, with all the figures I have given, we have the Prime Minister descending from the misty stratosphere where he has been disporting himself with such singularly little effect and taking charge once again, as he did in

1956, of our economic affairs. We remember the Prime Minister's previous intervention in economic affairs—the start of the great stagnation; prescription charges, the collapse of sterling following Suez.
Yet only very recently—and I am sorry that the Prime Minister is not here because I want to quote some of his more eloquent passages—he told us that the economic problem was solved. His always significant coefficient of euphoric misrepresentation, of course, reached an all-time high in the election. On 23rd September, 1959, he said:
The British economy is sounder than at any time since the First World War. Sterling has been re-established as a strong and respected currency. Our balance of payments is strong.
I was hoping to get some applause for that, because it was said by him in a year when we chalked up the miserable balance of payments surplus of £139 million and were moving into a year with a deficit of close on £200 million.
Again, he told us:
I do not remember any time in my life when the economy has been so sound and the prosperity of our people at home so widely spread.
Four months after that speech, the brakes were put on. Ten months later, he appointed the right hon. Gentleman the Member for Wolverhampton, South West (Mr. Powell) to be Minister of Health.
Of course, we have had all this kind of talk in successive election manifestos. In 1955, it was claimed that under a Conservative Administration we had
broken away at long last from the regular cycle of crises.
That was six years ago. I will take another gem:
The future beckons this generation with a golden finger".
Of course, no one said whose finger was going to be in the gold. It went on:
Peace can bring abundance for all, if we match the opportunity with the will to prosper.
Abundance for all, after last week? Is it abundance for all, except the old and the sick? Now, of course, the magic has gone. MacWonder has become MacTarnish. But that does not alter the fact that those words I have quoted were from the prospectuses on which right hon. Gentlemen opposite got themselves elected.
I gather that a sizeable number of right hon. and hon. Members opposite are now incensed at the noble Lord, Lord Hailsham's repudiation of their earlier election pledge about free drugs for private patients. I do not know why there has been all the fuss about the Hailsham doctrine of not being bound by promises made by the Tories in elections which they lose. They have never paid any attention to the promises they made in elections they won.
It may be the Chancellor—I do not know—but I suspect that it is the Prime Minister who is behind all the pre-Budget kites which are being flown. All the suggestions, repeated again today, that our export effort is being held back because manufacturers and traders feel that their Surtax is too high are a gross libel on the patriotism of British businessmen. But I repeat the warnings I have given to the Chancellor. First, let him ignore the pressure to transfer the burden from direct taxation to indirect taxation, the pressure to make the tax system more unjust and regressive. If he wants to alter the balance within the taxation structure, let him shift it from taxation on earned income to taxation on unearned income.
Second, let the right hon. and learned Gentleman realise that, if he is thinking of using the proceeds of the Health Service cuts to reduce taxation on the richest taxpayers, he will, as we warned him last week, arouse a storm such as he has not seen since Suez.
Third, if he wants to review direct taxation—and we have often said that rates generally are too high—let him first make a real drive against tax avoidance. When I say that, I do not mean just the familiar ones, expense accounts and so forth. I have in mind also the virtual frustration of death duties by gifts and ingenious trusts of all kinds. Let him introduce the capital gains tax. Then, having done all that, let him apply the proceeds not to the benefit of the Surtax payer but to improve personal and child allowances and the earned income allowance.
Having reviewed the facts of our economic situation, with its weaknesses and dangers, I come now to my main proposal. For years we have deplored

the Government's abandonment of planning. For years we have advocated a four-year or five-year plan covering the lifetime of a single Parliament to strengthen our industrial base, to increase exports and—I do not need to emphasise this—to fortify the social services against the attacks of Ministers whose 'political stock-in-trade is to preach a rather selective austerity directed against the poorest sections of the community.
When I refer to a four-year plan, let no one under-rate the success in expanding industry, investment and export earning capacity achieved by the Labour Government in the implementation of the four-year plan that was put to the O.E.E.C. in 1948, from the success of which the Conservatives were quick to gather the fruits. [HON. MEMBERS: "Oh."] Certainly. Without that expansion of the basic industries and of exports, it would have been impossible for them to achieve anything at all. The Government should announce now a four-year plan for sustained industrial expansion, investment and increased exports.
We are all pledged to maintain full employment, even if that pledge rings a little hollow in the industrial Midlands, Scotland and elsewhere today. The Government will know that by 1970, allowing for changing age-distribution and for every measurable factor, we shall have to find work for 1,100,000 more people—that is about 5 per cent. more—and for 700,000 more by 1965. This emphasises the tremendous apprenticeship and juvenile employment problem with which my hon. Friend the Member for Newton (Mr. Lee) dealt today.
With those figures of increased manpower in the country, if we assume productivity increasing at only 3 per cent. per annum—we ought to be capable of something very much higher than that—in order to maintain full employment in 1965 national production will need to be 20 per cent. and in 1970 42 per cent. above the 1960 level. I suggest to the Government that they should make those calculations the basis of the plan and then draw up a series of investment programmes in the key industries, both public and private—such as fuel and power, steel, machine tools, chemicals and the rest—designed to ensure the necessary rate of expansion and the


selective expansion of the industries which can make the best contribution to essential investment and to exports, because we all know by now that we will not get our exports by the overspill of the affluent society or by trying to sell to highly-advanced industrialised countries the sort of things we are building up in this country to meet the television consumer market.
Having done that, they should draw up and measure the public commitments for years ahead in the social services, including education and health, and ensure that the resources will be there to meet them. I suggest that the Government should draw up and publish a national plan on this basis. There is no time tonight to go into the details of it. [HON. MEMBERS: "Oh."] If the Government will give another day to debate this matter, then I shall be happy to go into full details. Tonight I can only summarise what this programme would mean if we were to embark on a national plan for expansion. We cannot achieve such a programme without physical controls, such as building licensing to hold back less essential industries in the interests of a full realisation of an expansion programme for essential industry. Hon. Members know perfectly well that Mr. Clore and Mr. Cotton can spend millions of pounds on putting up speculative office blocks, whereas an important county council has been to the House today to protest because its essential school programme has been cut by half. Do not the Government realise that all these resources, whether for offices or schools, come out of the same national pool?
The fullest consultation with both sides of industry will be needed. It will mean taking a great deal more of the essential commanding heights of the economy into public ownership. I have referred to the record of some of our private industries in world markets. Last Friday, a Minister stood at the Dispatch Box and told us that this country leads the world in the development of nuclear power for civil use. That was done by public authority and public ownership.
It will also mean the full mobilisation of the scientific resources of this country, more scientists and technologists and facilities for training them. It will mean redeployment away from unproductive

missile research, still more redeployment from unproductive work to provide more frivolities for advertising agents to get worked up about—in fact, redeployment for the real service of the nation.
If we are to have research and development contracts in defence, why cannot we have them for new machine tools, new automative methods, new textile machinery and new techniques in shipbuilding? The nation was shocked to read in the Mitchell Report that in ninety of the biggest machine-tool firms there were only twenty-five graduate research engineers.
This plan will mean that financial planning—monetary and Budget policy—must year by year match the physical plan, providing fiscal incentives to essential investment and making consumption, and not exports and investment, the residuary legatee. It will mean also adequate Budget provision for those in greatest need and industrial provision for adequate wages to match increases in national productivity. This is what a plan means.
One of the significant things of the past few weeks is the way that the idea of planning, planning for expansion, planning to recover our lost dynamic, is receiving support from quarters far beyond the Labour Party—the F.B.I., the merchant bankers, the bank chairmen, even the Bow Group in its recently published pamphlet. I only wish I had time to read its eloquent passages. Even the President of the Board of Trade had paid lip-service to the idea, although I am bound to say that such speeches from him carry about as much conviction as the sight of a confirmed alcoholic hiccupping his way into the Band of Hope.
Let us have from the President of the Board of Trade tonight, instead of his usual speech, which we all know and like so well, his acceptance of a purposive four-year plan for Britain. This is the only way to keep Britain's place in the world. It is the only way to guard our hard-won social services against the wreckers. The tragedy of last week is that, once again, the Conservatives are using an economic crisis brought on by their own policies as an excuse for attacking the social services.
In 1956, the Prime Minister reacted in the same way when he imposed the prescription charges. They were not


removed as we urged in the big tax handout of 1959. The National Health Service was born free. Last year, in the very month when we mourned the loss of the great architect of this greatest experiment in social services that the world has ever seen, the Prime Minister appointed the present Minister of Health to office. We warned then what would be the result of that appointment.
The country is facing a Tory-created crisis and so the sick and the aged must suffer. Pharmaceutical manufacturers, as evidence produced to the Public Accounts Committee last year showed, are making up to 108 per cent. profit on their capital out of the Health Service and getting away with it, and prodigiously wasteful advertising is paid for by the State, all because the Minister of Health refuses to control their prices. He even refuses to ask them if they will kindly let him see their cost schedules.
The language of priorities is the religion of Conservatism, too. Last November, I contrasted the £120 million worth of financed expense account cars with the refusal of the Minister of Health to provide invalid cars for paraplegic ex-miners. Today, I draw attention to £40 million worth of free drinks a year on the Chancellor of the Exchequer and a mean saving of a few thousand pounds a year on cod liver oil and orange juice—bloated expense account meals and vitamin tablets at the Assistance Board for old-age pensioners.
The Chancellor appeals for restraint, self-discipline and sacrifice. The Colonial Secretary, in a political broadcast, quoted President Kennedy's challenging phrase:
Ask not what your country will do for you. Ask rather what you can do for your country.
Let these appeals be made first to the take-over bid merchants, to the landlords, the racketeers in land and property and the speculative dealers on the Stock Exchange. Truly, all national wealth, all their private wealth, comes out of the national pool. It is the responsibility of the community and the responsibility of this House to the social services and the Budget to see that wealth and sacrifices are fairly shared.
Because the past week, especially this deliberate attack on the Health Service,

has marked more clearly than for years past the great chasm which divides the philosophies and policies of the two parties, a division that was so clearly illumined for us by the life work and fearless eloquence of Aneurin Bevan, I make no apology for ending my speech tonight with a quotation peculiarly appropriate for summing up our case in this debate and in the whole week's succession of debates.
I quote the last paragraph—the last sentence, indeed—of the last speech that Nye made. All who heard it ranked it among his greatest. I quote this last sentence. He said:
I have enough faith in my fellow creatures in Great Britain to believe that when they have got over the delirium of the television, when they realise that their new homes that they have been put into are mortgaged to the hilt, when they realise that the moneylender has been elevated to the highest position in the land, when they realise that the refinements to which they should look are not there, that it is a vulgar society of which no decent person could be proud, when they realise all these things, when the years go by and they see the challenge of modern society not being met by the Tories, who can consolidate their political powers only on the basis of national mediocrity, who are unable to exploit the resources of their scientists because they are prevented by the greed of their capitalism from doing so, when they realise that the flower of our youth goes abroad today because they are not being given opportunities of using their skill and their knowledge properly at home, when they realise that all the tides of history are flowing in our direction, that we are not beaten, that we represent the future: then, when we say it and mean it, then we shall lead our people to where they deserve to be d.

9.30 p.m.

The President of the Board of Trade (Mr. Reginald Maudling): May I start by congratulating the Leader of the Opposition on his rapid recovery, and also my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot) on his maiden speech in this debate.
The Government Amendment starts by referring to the improvement in the economic situation of the country since October, 1951, and the present high levels of employment, investment and consumption. I think that is right, because it is as wrong to minimise this country's achievements and progress as it is wrong to exaggerate them. I think we might start looking at what has been done in these years. We have maintained full


employment. Although unemployment is now at its seasonal peak, it is still under 2 per cent., which, I think, is full employment by the standards of the party opposite, and certainly by the standards of most of the countries quoted against us today in the league table.
We have also made good progress with the problem of local unemployment. I agree that the situation in Ulster is still exceedingly difficult and that there are problems in Scotland and on the North-East Coast. However, there is quite a lot going into Scotland, and when one looks at Merseyside there is a completely new future opening. In South Wales the entire industrial picture has been transformed. These are not small achievements. The current rate of investment in industry is over 50 per cent. up at constant prices compared with 1951. In 1960 there was great expansion, and we look forward to even more rapid expansion in 1961 in investment in manufacturing industries.
In 1954, the Home Secretary said that our target was to increase our standard of living at a rate which would double it in twenty-five years. He was scoffed at at that time, but since then we have done precisely that and slightly better. We have freed the economy at home and made sterling convertible. We have played a leading part in the world-wide move to freer trade. Expenditure on social services has nearly doubled since 1951, and we have borne our full share of the burden of defence of the West. Since the war we have provided by way of investment and aid in overseas countries over £2,500 million. We are devoting in aid to under-developed countries just as high a proportion of our resources as the United States. It is a record of achievement of which this country can be proud.
It is true that there are two important criticisms that can rightly be made and have been named throughout this debate. Firstly, we have not yet broken away from the intermittent balance of payments problems that so often restrict our growth. Related to this it can truly be said that a number of other countries have been expanding very much faster than we have. What is the answer to these two arguments?
We must recognise realistically that we are always working on very narrow margins indeed, first because we are

always committed by general agreement to driving the economy as fast and as far as we can, and every time one drives it up to that 100 per cent. there is danger of going too far and falling into the problem of inflation. Secondly, we cannot disguise the fact that since the war the resources available to back sterling in its full rô le as an international currency have not been adequate, hence the constant need to adjust our policies and to try to steer a way between deflation and the loss of resources, on the one hand, and inflation and the threat to our currency on the other.
How can we get away from these constant hampering effects of our international position? There are two ways—first by improving the international credit base and secondly by increasing the proportion of our output that we export. As for the international credit base, I and my right hon. and learned Friend have stated several times recently that we believe that the International Monetary Fund should be used as a normal method of support for a currency. Just as one uses a bank, so one should use the International Monetary Fund and there should be no idea that a country using the Fund is admitting itself to be in any particular difficulties.
The resources of the Fund were substantially increased in 1959 and I have a feeling that the problem now may not be so much what is in the Fund, or the general problem of lack of liquidity in the world trading system, as the problem of lack of balance between surplus countries and deficit countries, the surplus countries taking into their pools most of the counters normally used for the improvement of trade.
We, in conjunction with the United States, have been doing a great deal to try to bring home to surplus countries their responsibility to the world as a whole to ensure the expansion of world trade. I am sure that we were all delighted to read what President Kennedy has been saying about this problem. Certainly there can be no doubt that the two great reserve currencies of the world, the dollar and sterling, have their interests inextricably linked together, and the more we can work together in our policies the better for us and for the whole of the free world.
The second way in which we can cushion ourselves to some extent against a change in the international situation is by increasing the proportion of our national output that we sell abroad. Recently, I am afraid, it has not been going forward. The most serious statistic in our economy is that, while some countries have been increasing the proportion of exports in their total output, ours has been falling. Unless we reverse that trend I cannot see how we shall procure ourselves elbow room to avoid the constant fluctuations in world conditions and the impacts on our domestic economy that we all want to avoid.
The second criticism is that other countries are going faster than us in the expansion of their production. Some people ask whether that is important and whether as long as we go fast enough for our purposes we have to worry if others go faster still. That is a false argument. If we go on relatively falling behind other people, after a time we shall absolutely decline also. This we cannot neglect.
Some of the comparisons are misleading. In gross national product per head from 1951 to 1959 we advanced faster than the United States but substantially slower than France or Germany. The lessons to be learned from these comparisons are not easy to discern. We cannot draw from German expansion any argument for any more controls or centralised planning. We have also to consider the great increase in labour supplies available to Germany and the level of unemployment in Germany in the 1950s which was so far above what would have been tolerated in this country. There are therefore not so many lessons to be drawn.
We are glad to see our friends in France prospering. They have made substantial increases in production, but it has been at the cost of repeated devaluation of the franc. I am sure that the party opposite will agree that whatever Government is in power the strength of sterling and all that depends on it must take priority over all other considerations. That is what the right hon. Member for Huyton (Mr. H. Wilson) said in April, 1958. I agreed with him then as I agree with him now.
Whilst we are on these comparisons, perhaps I could refer to the Surtax point

which has been raised on more than one occasion in the debate. In a league table of ourselves, America, Germany and France, when it comes to Surtax on executives, we are at the top, and there may be some connection between these two things.
Take a senior executive, earning £5,000 a year, who earns by his efforts in another year £6,000—I think that is the popular figure in some quarters at the moment. Of that additional £1,000, the man in America keeps £720, in France £690, in Germany £600, and in the United Kingdom only £400.
These are serious figures, and when people say that it does have an effect upon businessmen, it is rather nonsense for the right hon. Gentleman, as he sometimes does, to talk about lack of patriotism, sabotage of the national effort, and so on. That is not a proper reading of human nature.
If we are asking people, as we are, to go into the export markets—which are often more difficult, more expensive, more rigorous and more arduous than the home market—because it is in the national interest that they should do so, they are entitled to say, "If we do that, is it right that we should have so much more of our earnings taken away than is case with our competitors?"
I am not saying that that is an overriding or decisive argument, but in the interests of a realistic appraisal of the problem it should not be thrown on one side.

Mr. E. Fernyhough: Is that not assuming that all supertax payers are exporters?

Mr. Maudling: The argument assumes that a lot of important exporters are surtax payers.
I accept that at the present stage in our history, the prime object of economic policy, without sacrificing the stability of prices which we have obtained, is to get a more rapid and more consistent rate of growth. What has inhibited us up to now has been the fact that, if we allow demand to expand, the home market gets too strong, incomes rise faster than output, prices rise, imports rise and exports fall. That is a familiar experience which we have seen time and again.
If we are to have more expansion, it must be for both domestic and external


reasons, expansionist without being inflationary. Looking at the suggestions made in the debate, I cannot recall anything said from the benches opposite that helps us with this vital problem.
Several right hon. and hon. Gentlemen have talked about import controls, and there seems to be some disagreement among them on the subject. The hon. Member for Grimsby (Mr. Crosland) wants more imports to provide more competition. The right hon. Member for Battersea, North (Mr. Jay) does not seem to like imports at all, as far as I can see. The right hon. Member for Huyton has recently been saying how silly it is to import luxuries from the United States. I am glad to see that his right hon. Friend the Leader of the Opposition has been pressing Americans to import luxuries from Britain.
All this confusion of counsel seems to me to leave some doubt as to the validity of their arguments. Of course, import controls are no help to the problem of inflation. We all know that. I am not sure what effect they would have on the balance of payments. The increase in our imports in 1960, compared with 1959, was overwhelmingly in materials, semimanufactures and machinery—capital goods for industry. Out of well over £500 million total increase in imports, only £45 million came from consumer goods.
There is, of course, the General Agreement on Tariffs and Trade, under which we are obliged not to maintain quotas unless serious balance of payments problems arise. When the right hon. Member for Battersea, North tells me that we were wrong and prematurely removed, in 1958 and 1959, the discriminatory quotas against the United States, he should have taken counsel with his right hon. Friend the Member for Huyton, who pointed out to us today how good our balance with the United States was at that time and how we had no justification for maintaining these controls.
We must, however, be careful in talking about import controls, because the basic fact of the economy is that we need more urgently the goods we buy than our customers need the things we sell.
We must have food and raw materials and have them regularly. The bicycles, the motor cars, the machinery, the equipment, the textiles, the pottery which we sell are things which people can do without for a long time, if they want. If we stop buying luxuries from other people, what about Scotch whisky, Northern Irish linen, fine bone china, luxury motor cars and first quality British clothing? If we are to say that it is a bad thing to import luxuries or inessentials, what are we to export? This argument is exceedingly dangerous and I am glad to see that the hon. Member for Grimsby does not accept it, and I believe that other hon. Members opposite do not accept it.
Then there is the argument about planning, which we heard again from the right hon. Member for Huyton this evening. I agree that we can do with more and better planning in both public and private investment. There is no doubt about that and I do not deny it, but we must beware the limitations of planning and not try to plan the unplannable. The fundamental thing is that it is possible to plan what one is to produce, but one cannot plan what one is to sell, particularly what one is to sell abroad. I think that the party opposite would agree that, because we were a country dependent for its existence on international trade, many of the factors governing our economic development were quite beyond the effective influence of the planner, and wide deviations from even plans most recently drawn up were therefore unavoidable. That comes from the Economic Survey of 1948.
That was a year in which hon. Members apposite were reporting on their objectives for 1947 and on how far they had been fulfilled. The estimate of the deficit on current account was £325 million, or 93 per cent., greater than had been planned. No wonder they gave up that part of the White Paper after that.
People talking about planning often confuse planning with forecasting. In a free economy, in which the consumers decide what they are to buy and when they are to buy it, one cannot plan one's retail sales and one certainly cannot plan exports. What we need to do is to get the best possible forecasts, and that is what has happened in the public sector.
In the case of electricity generation, for example, the plan for investment in electricity is based, not on the desire to produce a certain amount of electricity, but on an assessment of what the demand will be. It is based on a forecast and on meeting that forecast. Obviously, all successful Government or private planning is based upon forecasting demand and how it is to be met.
I have been very interested in what the F.B.I. has been saying about better planning—and I think that it means forecasting—in the private sector, and I propose to discuss with the Federation how we can make progress in these ways. But we must not forget these two limitations: first, that in a competitive industry one may be able to get an agreed view of what is to be the total demand for the product, but one cannot expect each manufacturer to disclose his own plans for his own output to his competitors; secondly, we must not forget that a single, co-ordinated forecast may be a very good thing, but it may produce a single, co-ordinated mammoth error if we get it wrong.
Accepting the limits of planning, I am sure that it is worth while considering whether the Government and industry together can find ways of improving our forecasting of demand, because on the forecasting of demand all rational planning must depend.
We have been talking about growth. The reason why we are not growing so fast lies deeper than this. Many quotations have been given from the P.E.P. book and I want to give that which interested me most:
It is probably true that the chief impediment to the faster growth of the British economy is that we do not want it enough … The British worker is as persistent in his demands for higher wages as workers in any other country. But the crux is that he is not so prepared, for example, as the American is, to take risks, move to a new job, and fight for advancement … Similarly for the British businessman; the aggressive, dynamic, restless spirit is not so much in evidence as the desire for an easy life and small but safe profits".
I think that there is a great deal of truth in that.
If this country is going to have a policy of greater growth without inflation, it has consciously to will that policy. I am not sure that we will it

at the moment. It means priority for exports and investments. It means holding back consumption at home so that the whole of our increasing productivity is not absorbed in home consumption. It means the encouragement of even greater levels of savings. After all, we have had a great deal of additional savings in recent years, but we need and must have even more.
As regards exports, this is a matter for the Government and industry together. We can aid by providing services and facilities. We have made many improvements recently in E.C.G.D., and I think that we will be able to produce more in future. We are stepping up all the time our services to exporters and the encouragement we give to industrial associations, but by and large the level of exporting depends upon quality, delivery and reliability and if we are to make significant increases in the sales of our products abroad we have to do a great deal, employers and workpeople alike, to prevent hold-ups in deliveries, to ensure that our goods arrive on time, and ensure that when they arrive they are reliable in use.
A policy of growth means full use of our labour force, our scarcest commodity. It means developing the skills of our people because the present shortage of skilled labour is not only holding back many industries, but often the employment of many semi-skilled men as well.
We must have much more mobility of labour, mobility not necessarily so much between place and place, but between industry and industry, and between skill and skill. We cannot have greater growth unless we put more and more of our resources into those industries like plastics and chemicals where the expansion is taking place. This mobility—this problem of retraining and the problem of the attitude of people to their jobs—is what must be encouraged.
There must be no waste of labour. We cannot have economic growth in the country if we do not make full use of the new machinery to save manpower, once again our scarcest commodity.
There must be incentives at all levels. There must be incentives by way of proper remuneration for additional skill, whether it be skill with the hands, or


skill in learning a language to act as an export salesman. There must be adequate differentials and adequate payment for additional skills.
There must be more competition at home as well as abroad. I agree with the hon. Member for Grimsby that too much protection can be unhealthy. I want to see in the coming meeting of G.A.T.T. really big and effective reductions in industrial tariffs on a reciprocal basis between ourselves and the other major trading nations. It will be good for us by providing more export opportunities. It will be good for us by providing more competition at home.
We must look at mergers and amalgamations in industry with the eye of reason and not with the eye of prejudice. We must look at these proposals on their merits and not solely on their demerits, as I think the party opposite often tends to do. No doubt in some of the techniques of take-over bids we see from time to time there may be cause for alarm, but the Jenkins Committee is examining that at the present moment. Equally, where mergers lead to the extinction of competition, or the possibility of extinguishing competition, we have the Monopolies Commission ready to investigate and deal with the situation. But the party opposite makes the fundamental mistake of confusing size and monopoly. Every time a business is big hon. Members opposite say that it is a monopoly. I once heard an hon. Member opposite talking about the terrible social effects of competition between the giant monopolies.
Surely what we want in this country is more competition among our own manufacturers and more competition in imports, too, but the stronger the units doing the competing the better for the country. So much industrial strength can be gained by amalgamation, rationalisation, joint selling and joint research. The party opposite so often says that private enterprise consists of small fragmented units that cannot stand up to modern industrial conditions, and when we get rationalisations hon. Gentlemen opposite complain about that too.
Research and development of course also need considerable expansion. I think that the Mitchell Report on the machine-tool industry will point the way

to a considerable expansion of research and development facilities in that industry.
If we want a vigorously expanding Britain, we must all wish not only for that but for the consequences, too. There is no room in an expanding Britain fox the man who is content with a safe home market; there is no room for the man who thinks that research and development is something for the long-haired boys and foreigners but not for him: there is no room for the man who thinks that he is entitled to work always at the same job irrespective of the demand for his products; there is no room for any unjustifiable restrictions on the number of skilled men who are trained; there is no room for restrictions on the transport of labour and capital from job to job in order to meet demand as it changes; there is no room for any scheme which is designed to waste manpower by unnecessary employment on new machinery; there is no room for any policy of increasing profits by restricting output rather than increasing efficiency, and, above all, there is no room for anyone who wants and demands a high degree of protection against fair competition.
It may be that the things I am saying are uncomfortable, but they are true. The fact is that we are and have been an easy-going people. We have not the population problems of the Japanese pressing upon us all the time to force us to make additional efforts and take additional risks. We have not the spur—and it is a spur—of defeat and occupation in war. We have not the memory of successive disastrous inflations, as the people in Germany have. These things are not in our national history and tradition, or our national temperament.
But if, in the absence of the incentives that other people feel, we are going to try deliberately to match their rate of growth, we must take the decision to do so. It is not a matter that Government policy alone can deal with; it is for Government, industry and workpeople together. All of us must realise that if Britain is going through what I believe is possibly a critical moment in its economic history we must strike out firmly and boldly for expansion, and we must all do it together.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 228, Noes 317.

Division No. 38.]
AYES
[9.58 p.m.


Abse, Leo
Hayman, F. H.
Pargiter, G. A.


Ainsley, William
Healey, Denis
Parker, John (Dagenham)


Albu, Austen
Henderson, Rt.Hn.Arthur (RwlyRegis)
Parkin, B. T. (Paddington, N.)


Allaun, Frank (Salford, E.)
Herbison, Miss Margaret
Pavitt, Laurence


Allen, Scholefield (Crewe)
Hewitson, Capt, M.
Pearson, Arthur (Pontypridd)


Awbery, Stan
Hill, J. (Midlothian)
Peart, Frederick


Bacon, Miss Alice
Hilton, A. V.
Pentland, Norman


Baird, John
Holman, Percy
Plummer, Sir Leslie


Baxter, William (Stirlingshire, W.)
Holt, Arthur
Prentice, R. E.


Bellenger, Rt. Hon. F. J.
Houghton, Douglas
Price, J. T. (Westhoughton)


Bence, Cyril (Dunbartonshire, E.)
Howell, Charles A.
Probert, Arthur


Blackburn, F.
Hoy, James H.
Proctor, W. T.


Blyton, William
Hughes, Cledwyn (Anglesey)
Pursey, Cmdr. Harry


Boardman, H.
Hughes, Emrys (S. Ayrshire)
Rankin, John


Bowden, Herbert W. (Leics, S.W.)
Hughes, Hector (Aberdeen, N.)
Redhead, E. C.


Bowles, Frank
Hynd, H. (Accrington)
Reid, William


Braddock, Mrs. E. M.
Hynd, John (Attercliffe)
Reynolds, G. W.


Brockway, A. Fenner
Irvine, A. J. (Edge Hill)
Roberts, Albert (Normanton)


Broughton, Dr. A. D. D.
Irving, Sydney (Dartford)
Roberts, Goronwy (Caernarvon)


Brown, Alan (Tottenham)
Janner, Sir Barnett
Robinson, Kenneth (St. Pancras, N.)


Brown, Rt. Hon. George (Belper)
Jay, Rt. Hon. Douglas
Ross, William


Butler, Herbert (Hackney, C.)
Jeger, George
Royle, Charles (Salford, West)


Butler, Mrs. Joyce (Wood Green)
Jenkins, Roy (Stechford)
Shinwell, Rt. Hon. E.


Callaghan, James
Johnson, Carol (Lewisham, S.)
Silverman, Julius (Aston)


Chetwynd, George
Jones, Rt. Hn. A. Creech (Wakefield)
Silverman, Sydney (Nelson)


Cliffe, Michael
Jones, Dan (Burnley)
Skeffington, Arthur


Corbet, Mrs. Freda
Jones, Jack (Rotherham)
Slater, Mrs. Harriet (Stoke, N.)


Craddock, George (Bradford, S.)
Jones, J. Idwal (Wrexham)
Slater, Joseph (Sedgefield)


Cronin, John
Jones, T. W. (Merioneth)
Small, William


Crosland, Anthony
Kelley, Richard
Smith, Ellis (Stoke, S.)


Crossman, R. H. S.
Kenyon, Clifford
Snow, Julian


Cullen, Mrs. Alice
Key, Rt. Hon. C. W.
Sorensen, R. W.


Darling, George
King, Dr. Horace
Soskice, Rt. Hon. Sir Frank


Davies, Rt. Hn.Clement (Montgomery)
Lawson, George
Spriggs, Leslie


Davies, G. Elfed (Rhondda, E.)
Ledger, Ron
Steele, Thomas


Davies, Harold (Leek)
Lee, Frederick (Newton)
Stewart, Michael (Fulham)


Davies, Ifor (Gower)
Lee, Miss Jennie (Cannock)
Storehouse, John


Davies, S. O. (Merthyr)
Lever, Harold (Cheetham)
Stones, William


Deer, George
Lever, L. M. (Ardwick)
Strauss, Rt. Hn. G. R. (Vauxhall)


de Freitas, Geoffrey
Lewis, Arthur (West Ham, N.)
Stross,Dr.Barnett (Stoke-on-Trent,C.)


Delargy, Hugh
Lipton, Marcus
Swain, Thomas


Dempsey, James
Logan, David
Swingler, Stephen


Diamond, John
Loughlin, Charles
Sylvester, George


Dodds, Norman
Mahon, Dr. J. Dickson
Symonds, J. B.


Donnelly, Desmond
McCann, John
Taylor, Bernard (Mansfield)


Driberg, Tom
MacColl, James
Thomas, George (Cardiff, W.)


Ede, Rt. Hon. C.
Mclnnes, James
Thompson, Dr. Alan (Dunfermline)


Edelman, Maurice
McKay, John (Wallsend)
Thomson, G. M. (Dundee, E.)


Edwards, Rt. Hon. Ness (Caerphilly)
Mackie, John
Thornton, Ernest


Edwards, Robert (Bilston)
McLeavy, Frank
Thorpe, Jeremy


Edwards, Walter (Stepney)
MacMillan, Malcolm (Western Isles)
Timmons, John


Evans, Albert
Mallalieu, E. L. (Brigg)
Tomney, Frank


Fernyhough, E.
Mallalieu, J.P.W. (Huddersfield, E.)
Ungoed-Thomas, Sir Lynn


Fitch, Alan
Manuel, A. C.
Wade, Donald


Fletcher, Eric
Mapp, Charles
Wainwright, Edwin


Foot, Dingle (Ipswich)
Marquand, Rt. Hon. H. A.
Warbey, William


Foot, Michael (Ebbw Vale)
Marsh, Richard
Watkins, Tudor


Forman, J. C.
Mason, Roy
Wells, William (Walsall, N.)


Fraser, Thomas (Hamllton)
Mayhew, Christopher
White, Mrs. Eirene


Gaitskell, Rt. Hon. Hugh
Mellish, R. J.
Whitlock, William


Galpern, Sir Myer
Mendelson, J. J.
Wigg, George


George, LadyMeganLloyd (C'rm'rth'n)
Millan, Bruce
Wilcock, Group Capt. C. A. B.


Ginsburg, David
Milne, Edward J.
Wilkins, W. A.


Gooch, E. G.
Mitchison, G. R.
Willey, Frederick


Cordon Walker, Rt. Hon. P. C.
Monslow, Walter
Williams, D. J. (Neath)


Gourlay, Harry
Moody, A. S.
Williams, LI. (Abertillery)


Greenwood, Anthony
Morris, John
Williams, W. R. (Openshaw)


Grey, Charles
Mulley, Frederick
Willis, E. G. (Edinburgh, E.)


Griffiths, Rt. Hon. James (Llanelly)
Neal, Harold
Wilson, Rt. Hon. Harold (Huyton)


Griffiths, W. (Exchange)
Noel-Baker, Francis (Swindon)
Winterbottom, R. E.


Grimond, J.
Noel-Baker, Rt. Hn.Philip (Derby,S.)
Woodburn, Rt. Hon. A.


Gunter, Ray
Oram, A. E.
Woof, Robert


Hale, Leslie (Oldham, W.)
Oswald, Thomas
Yates, Victor (Ladywood)


Hall, Rt. Hon. Glenvil (Colne Valley)
Owen, Will
Zilliacus, K.


Hamilton, William (West Fife)
Padley, W. E.



Hannan, William
Paget, R. T.
TELLERS FOR THE AYES:


Hart, Mrs. Judith
Pannell, Chanes (Leeds, W.)
Mr. G. H. R. Rogers and Mr. Short.




NOES


Agnew, Sir Peter
Farey-Jones, F. W.
Lancaster, Col. C. G.


Aitken, W. T.
Farr, John
Langford-Holt, J.


Allan, Robert (Paddington, s.)
Fell, Anthony
Leather, E. H. C.


Arbuthnot, John
Finlay, Graeme
Leavey, J. A.


Ashton, Sir Hubert
Fisher, Nigel
Lewis, Kenneth (Rutland)


Atkins, Humphrey
Fletcher-Cooke, Charles
Lilley, F. J. p.


Barber, Anthony
Forrest, George
Lindsay, Martin


Barlow, Sir John
Fraser, Ian (Plymouth, Sutton)
Linstead, Sir Hugh


Barter, John
Freeth, Denzil
Litchfield, Capt. John


Batsford, Brian
Galbraith, Hon. T. G. D.
Lloyd, Rt. Hon. Selwyn (Wirral)


Baxter, Sir Beverley (Southgate)
Gammans, Lady
Longbottom, Charles


Beamish, Col. Sir Tufton
Gardner, Edward
Longden, Gilbert


Bell, Ronald
George, J. C. (Pollok)
Loveys, Walter H.


Bennett, F. M. (Torquay)
Gibson-Watt, David
Low, Rt. Hon. Sir Toby


Bennett, Dr. Reginald (Gos &amp; Fhm)
Glover, Sir Douglas
Lucas-Tooth, Sir Hugh


Berkeley, Humphry
Glyn, Dr. Alan (Clapham)
McAdden, Stephen


Bevins, Rt. Hon. Reginald (Toxteth)
Glyn, Sir Richard (Dorset, N.)
MacArthur, Ian


Bidgood, John C.
Godber, J. B.
McLaren, Martin


Biggs Davison, John
Coodhart, Philip
McLaughlin, Mrs. Patricia


Bingham, R. M.
Goodhew, Victor
Maclay, Rt. Hon. John


Birch, Rt. Hon. Nigel
Gower, Raymond
Maclean,Sir Fitzroy (Bute&amp;N.Ayrs.)


Bishop, F. P.
Grant, Rt. Hon. William
Macleod, Rt. Hn. lain (Enfield, W.)


Black, Sir Cyril
Grant-Ferris, Wg Cdr. R.
MacLeod, John (Ross &amp; Cromarty)


Bossom, Clive
Green, Alan
McMaster, Stanley R.


Bourne-Arton, A.
Gresham Cooke, R.
Macmillan, Rt. Hn.Harold (Bromley)


Box, Donald
Grimston, Sir Robert
Macmillan, Maurice (Halifax)


Boyd-Carpenter, Rt. Hon. John
Grosvenor, Lt.-Col. R. G.
Macpherson, Niall (Dumfries)


Boyle, Sir Edward
Hall, John (Wycombe)
Maddan, Martin


Braine, Bernard
Hamilton, Michael (Wellingborough)
Maitland, Sir John


Brewis, John
Hare, Rt. Hon. John
Manningham-Buller, Rt. Hn. Sir R.


Bromley-Davenport,Lt. -Col. Sir Walter
Harris, Frederic (Croydon, N.W.)
Markham, Major Sir Frank


Brooke, Rt. Hon. Henry
Harris, Reader (Heston)
Marlowe, Anthony


Brooman-White, R.
Harrison, Brian (Maldon)
Marples, Rt. Hon. Ernest


Browne, Percy (Torrington)
Harvey, Sir Arthur Vere (Macclesf'd)
Marshall, Douglas


Bryan, Paul
Harvey, John (Walthamstow, E.)
Marten, Neil


Bullard, Denys
Harvie Anderson, Miss
Mathew, Robert (Honlton)


Bullus, Wing Commander Eric
Hastings, Stephen
Matthews, Gordon (Meriden)


Burden, F. A.
Hay, John
Maudling, Rt. Hon. Reginald


Butcher, Sir Herbert
Heald, Rt. Hon. Sir Lionel
Mawby, Ray


Butler,Rt. Hn.R.A. (Saffron Walden)
Heath, Rt. Hon. Edward
Maxwell-Hyslop, R. J.


Campbell, Sir David (Belfast, S.)
Henderson, John (Cathcart)
Maydon, Lt.-Cmdr. S. L. C.


Campbell, Gordon (Moray &amp; Nairn)
Henderson-Stewart, Sir James
Mills, Stratton


Carr, Compton (Barons Court)
Hendry, Forbes
Montgomery, Fergus


Channon, H. P. G.
Hicks Beach, Maj. W.
More, Jasper (Ludlow)


Chataway, Christopher
Hiley, Joseph
Mott-Radclyffe, Sir Charles


Chichester-Clark, R.
Hill, Dr. Rt. Hon. Charles (Luton)
Nabarro, Gerald


Clark, Henry (Antrim, N.)
Hill, Mrs. Eveline (Wythenshawe)
Neave, Airey


Clark, William (Nottingham, S.)
Hill, J. E. B. (S. Norfolk)
Nicholls, Sir Harmar


Clarke, Brie. Terence (Portsmth, W.)
Hinchingbrooke, Viscount
Nicholson, Sir Godfrey


Cleaver, Leonard
Hirst, Geoffrey
Noble, Michael


Cole, Norman
Hobson, John
Nugent, Sir Richard


Cooper, A. E.
Hocking, Philip N.
Oakshott, Sir Hendrle


Cordeaux, Lt.-Col. J. K.
Holland, Philip
Ormsby Gore, Rt. Hon. D.


Cordle, John
Hollingworth, John
Orr-Ewing, C. Ian


Corfield, F. V.
Hopkins, Alan
Osborn, John (Hallam)


Costain, A. P.
Hornby, R. P.
Osborne, Cyril (Louth)


Coulson, J. M.
Howard, Hon. G. R. (St. Ives)
Page, John (Harrow, West)


Courtney, Cdr. Anthony
Howard, John (Southampton, Test)
Pannell, Norman (Kirkdale)


Craddock, Sir Beresford
Hughes Hallett, Vice-Admiral John
Partridge, E.


Critchley, Julian
Hughes-Young, Michael
Pearson, Frank (Clitheroe)


Crosthwaite-Eyre, Col. O. E.
Hurd, Sir Anthony
Peel, John


Crowder, F. P.
Hutchison, Michael Clark
Percival, Ian


Cunningham, Knox
Iremonger, T. L.
Peyton, John


Curran, Charles
Irvine, Bryant Godman (Rye)
Pickthorn, Sir Kenneth


Currie, G. B. H.
Jackson, John
Pike, Miss Mervyn


Dalkeith, Earl of
James, David
Pilkington, Sir Richard


Dance, James
Jenkins, Robert (Dulwlch)
Pitman, I. J.


d'Avigdor-Coldsmld, Sir Henry
Jennings, J. C.
Pitt, Miss Edith


Deedes, W. F.
Johnson, Dr. Donald (Carlisle)
Pott, Percivall


Digby, Simon Wingfield
Johnson, Eric (Blackley)
Powell, Rt. Hon. J. Enoch


Donaldson, Cmdr. C. E. M.
Johnson Smith, Geoffrey
Price, David (Eastleigh)


Doughty, Charles
Jones, Rt. Hn. Aubrey (Hall Green)
Price, H. A. (Lewisham, W.)


Drayson, G. B.
Joseph, Sir Keith
Prior, J. M. L.


du Cann, Edward
Kaberry, Sir Donald
Prior-Palmer, Brig. Sir Otho


Duncan, Sir James
Kerans, Cdr. J. S.
Profumo, Rt. Hon. John


Duthie, Sir William
Kerby, Capt. Henry
Proudfoot, Wilfred


Eden, John
Kerr, Sir Hamilton
Ouennell, Miss J. M.


Elliot, Capt. Walter (Carshalton)
Kershaw, Anthony
Rawlinson, Peter


Elliott, R.w. (N'wc'stle-upon-Tyne,N.)
Kimball, Marcus
Redmayne, Rt. Hon. Martin


Emery, Peter
Kirk, Peter
Rees, Hugh


Emmet, Hon. Mrs. Evelyn
Kitson, Timothy
Rees-Davies, W. R.


Errington, Sir Eric
Lagden, Godfrey
Renton, David


Erroll, Rt. Hon. F. J.
Lambton, Viscount
Ridley, Hon. Nicholas

Ridsdale, Julian
Studhoime, Sir Henry
Vickers, Miss Joan


Rippon, Geoffrey
Summers, Sir Spencer (Aylesbury)
Vosper, Rt. Hon. Dennis


Roberts, Sir Peter (Heeley)
Sumner, Donald (Orpington)
Wakefield, Sir waved (St. M'lebone)


Robson Brown, Sir William
Talbot, John E.
Walker-Smith, Rt. Hon. Sir Derek


Roots, William
Tapsell, Peter
Wall, Patrick


Ropner, Col. Sir Leonard
Taylor, Sir Charles (Eastbourne)
Ward, Dame Irene


Royle, Anthony (Richmond, Surrey)
Taylor, Edwin (Bolton, E.)
Watkinson, Rt. Hon. Harold


Scott-Hopkins, James
Taylor, W. J. (Bradford, N.)
Watts, James


Seymour, Leslie
Teeling, William
Webster, David


Sharples, Richard
Temple, John M.
Wells, John (Maidstone)


Shaw, M.
Thatcher, Mrs. Margaret
Whitelaw, William


Shepherd, William
Thomas, Leslie (Canterbury)
Williams, Paul (Sunderland, S.)


Simon, Rt. Hon. Sir Jocelyn
Thomas, Peter (Conway)
Wills, Sir Gerald (Bridgwater)


Skeet, T. H. H.
Thompson, Kenneth (Walton)
Wilson, Geoffrey (Truro)


Smlthers, Peter
Thompson, Richard (Croydon, S.)
Wise, A. R.


Smyth, Brig. Sir John (Norwood)
Thorneycroft, Rt. Hon. Peter
Wolrige-Gordon, Patrick


Soames, Rt. Hon. Christopher
Thornton-Kemsley, Sir Colin
Woodhouse, C. M.


Spearman, Sir Alexander
Tiley, Arthur (Bradford, W.)
Woodnutt, Mark


Speir, Rupert
Tilney, John (Wavertree)
Woollam, John


Stanley, Hon. Richard
Turton, Rt. Hon. R. H.
Worsley, Marcus


Stevens, Geoffrey
Tweedsmuir, Lady



Steward, Harold (Stockport, S.)
Van Straubenzee, W. R.
TELLERS FOR THE NOES:


Stodart, J. A.
Vane, w. M. F.
Mr. E. Wakefield and


Stoddart-Scott, Col. Sir Malcolm
Vaughan-Morgan, Sir John
Colonel J. H. Harrison.

Question put, That the proposed words be there added:—

The House divided: Ayes 313, Noes 227.

Division No. 39.]
AYES
[10.10 p.m


Agnew, Sir Peter
Cordle, John
Grimston, Sir Robert


Altken, W. T.
Corfield, F. V.
Grosvenor, Lt.-Col. R. G.


Allan, Robert (Paddington, S.)
Costain, A. P.
Hall, John (Wycombe)


Arbuthnot, John
Coulson, J. M.
Hamilton, Michael (Wellingborough)


Ashton, Sir Hubert
Courtney, Cdr. Anthony
Hare, Rt. Hon. John


Atkins, Humphrey
Craddock, Sir Beresford
Harris, Frederic (Croydon, N.W.)


Barber, Anthony
Critchley, Julian
Harris, Reader (Heston)


Barlow, Sir John
Crosthwaite-Eyre, Col. O. E.
Harrison, Brian (Maldon)


Barter, John
Crowder, F. P.
Harvey, Sir Arthur Vere (Macclesf'd)


Batsford, Brian
Cunningham, Knox
Harvey, John (Walthamstow. E.)


Baxter, Sir Beverley (Southgate)
Curran, Charles
Harvie Anderson, Miss


Beamish, Col. Sir Tufton
Currie, G. B. H.
Hastings, Stepher.


Bell, Ronald
Dalkeith, Earl of
Hay, John


Bennett, F. M. (Torquay)
Dance, James
Heald, Rt. Hon. Sir Lionel


Bennett, Dr. Reginald (Gos &amp; Fhm)
d'Avigdor-Coldsmld, Sir Henry
Heath, Rt. Hon. Edward


Berkeley, Humphry
Deedes, W. F.
Henderson, John (Cathcart)


Bevins, Rt. Hon. Reginald (Toxtoth)
Digby, Simon Wlngfield
Henderson-Stewart, Sir James


Bldgood, John C.
Donaldson, Cmdr. C. E. M.
Hendry, Forbes


Biggs-Davlson, John
Doughty, Charles
Hicks Beach, Maj, W.


Bingham, R. M-
Drayson, G. B.
Hiley, Joseph


Birch, Rt. Hon. Nigel
du Cann, Edward
Hill, Dr. Rt. Hon. Charles (Luton)


Bishop, F. P.
Duncan, Sir James
Hill, Mrs. Eveline (Wythenshawe)


Black, Sir Cyril
Duthie, Sir William
Hill, J. E. B. (S. Norfolk)


Bossom, Clive
Eden, John
Hinchingbrooke, Viscount


Bourne-Arton, A.
Elliot, Capt. Walter (Carshalton)
Hirst, Geoffrey


Box, Donald
Elliott, R.W. (N'wc'stle-upon-Tyne,N.)
Hobson, John


Boyd-Carpenter, Rt. Hon. John
Emmet, Hon. Mrs. Evelyn
Hocking, Philip N.


Boyle, Sir Edward
Errington, Sir Erio
Holland, Philip


Braine, Bernard
Erroll, Rt. Hon. F. J.
Hollingworth, John


Brewls, John
Farey-Jones, F. W.
Hopkins, Alan


Bromley-Davonport, Lt. Col.Sir Walter
Farr, John
Hornby, R. P.


Brooke, Rt. Hon. Henry
Fell, Anthony
Howard, Hon. G. R. (St. Ives)


Brooman-White, R.
Finlay, Graeme
Howard, John (Southampton, Test)


Browne, Percy (Torrington)
Fisher, Nigel
Hughes Hallett, Vice-Admiral John


Bryan, Paul
Fletcher-Cooke, Charles
Hughes-Young, Michael


Bullard, Denys
Forrest, George
Hurt, Sir Anthony


Bullus, Wing Commander Eric
Fraser, Ian (Plymouth, Sutton)
Hutchison, Michael Clark


Burden, F. A.
Freeth, Denzil
Iremonger, T. L.


Butcher, Sir Herbert
Galbraith, Hon. T. G. D.
Irvine, Bryant Godman (Rye)


Butler, Rt.Hn.R.A. (Saffron Walden)
Gammans, Lady
Jackson, John


Campbell, Sir David (Belfast, S.)
Gardner, Edward
James, David


Campbell, Gordon (Moray &amp; Nairn)
George, J. C. (Pollok)
Jenkins, Robert (Dulwich)


Carr, Compton (Barons Court)
Gibson-Watt, David
Jennings, J. C.


Channon, H. P. G.
Glover, Sir Douglas
Johnson, Dr. Donald (Carlisle)


Chataway, Christopher
Glyn, Dr. Alan (Clapham)
Johnson, Eric (Blackley)


Chichester-Clark, R-
Glyn, Sir Riohard (Dorset, N.)
Johnson Smith, Geoffrey


Clark, Henry (Antrim, N.)
Godber, J. B.
Jones, Rt. Hn. Aubrey (Hall Green)


Clark, William (Nottingham, S.)
Goodhart, Philip
Joseph, Sir Keith


Clarke, Brig. Terence (Portsmth, W.)
Goodhew, Viotor
Kaberry, Sir Donald


Cleaver, Leonard
Gower, Raymond
Kerans, Cdr. J. S.


Cole, Norman
Grant. Rt. Hon. William
Kerby, Capt. Henry


Cooper, A. E.
Grant-Ferris, Wg Cdr. R.
Kerr, Sir Hamilton


Cordeaux, Lt.-Col. J. K.
Green, Alan
Kershaw, Anthony



Gresham Cooke, R.
Kimball, Marcus




Kirk, Peter




Kitson, Timothy
Ormsby Gore, Rt. Hon. D.
Stevens, Geoffrey


Lagden, Godfrey
Orr-Ewing, C. Ian
Steward, Harold (Stockport, S.)


Lambton, Viscount
Osborn, John (Hallam)
Stodart, J. A.


Lancaster, Col. C. G.
Osborne, Cyril (Louth)
Stoddart-Scott, Col. Sir Malcolm


Langford-Holt, J.
Page, John (Harrow, West)
Studholme, Sir Henry


Leather, E. H. C.
Pannell, Norman (Kirkdale)
Summer, Sir Spencer (Aylesbury)


Leavey, J. A.
Partridge, E.
Sumner, Donald (Orpington)


Lewis, Kenneth (Rutland)
Pearson, Frank (Clitheroe)
Talbot, John E.


Lilley, F. J. P.
Peel, John
Tapsell, Peter


Lindsay, Martin
Percival, Ian
Taylor, Sir Charles (Eastbourne)


Linstead, Sir Hugh
Peyton, John
Taylor, Edwin (Bolton, E.)


Litchfield, Capt. John
Pickthorn, Sir Kenneth
Taylor, W. J. (Bradford, N.)


Lloyd, Rt. Hon. Selwyn (Wirral)
Pike, Miss Mervyn
Teeling, William


Longbottom, Charles
Pilkington, Sir Richard
Temple, John M.


Longden, Gilbert
Pitman, I. J.
Thatcher, Mrs. Margaret


Loveys, Walter H.
Pitt, Miss Edith
Thomas, Leslie (Canterbury)


Low, Rt, Hon, Sir Toby
Pott, Percivall
Thomas, Peter (Conway)


Lucas-Tooth, Sir Hugh
Powell, Rt. Hon. J. Enoch
Thompson, Kenneth (Walton)


MacArthur, Ian
Price, David (Eastleigh)
Thompson, Richard (Croydon, S.)


McLaren, Martin
Price, H. A. (Lewisham, W.)
Thorneycroft, Rt. Hon. Peter


McLaughlin, Mrs. Patricia
Prior, J. M L.
Thornton-Kemsley, Sir Colin


Maclay, Rt. Hon. John
Prior-Palmer, Brig. Sir Otho
Tiley, Arthur (Bradford, W.)


Maclean,SirFitzroy (Bute&amp;N.Ayrs.)
Profumo, Rt. Hon. John
Tilney, John (Wavertree)


MacLeod, John (Ross &amp; Cromarty)
Proudfoot, Wilfred
Turton, Rt Hon. R. H.


McMaster, Stanley R.
Quennell, Miss J. M.
Tweedsmuir, Lady


Macmillan.Ht. Hn.Harotd (Bromley)
Rawlinson, Peter
Van Straubenzee, W. R.


Macpherson, Niall (Dumfries)
Redmayne, Rt. Hon. Martin
Vane, W. M. F.


Maddan, Martin
Rees, Hugh
Vaughan-Morgan, Sir John


Maitland, Sir John
Rees-Davies, W. R.
Vickers, Miss Joan


Manningham-Buller, Rt. Hn. Sir R.
Renton, David
Vosper, Rt. Hon. Dennis


Markham, Major Sir Frank
Ridley, Hon. Nicholas
Wakefield, Sir Wavell (St. M'lebone)


Marlowe, Anthony
Ridsdale, Jullan
Walker-Smith, Rt. Hon. Sir Derek


Marples, Rt. Hon. Ernest
Rippon, Geoffrey
Wall, Patrick


Marshall, Douglas
Roberts, Sir peter (Heeley)
Ward, Dame Irene


Marten, Neil
Robson Brown, Sir William
Watkinson, Rt. Hon. Harold


Mathew, Robert (Honlton)
Roots, William
Watts, James


Matthews, Gordon (Merlden)
Ropner, Col. Sir Leonard
Webster, David


Maudling, Rt. Hon. Reginald
Royle, Anthony (Richmond, Surrey)
Wells, John (Maidstone)


Mawby, Ray
Scott-Hopkins, James
Whitelaw, William


Maxwell-Hyslop, R, J.
Seymour, Leslie
Williams, Paul (Sunderland, S.)


Maydon, Lt.-Cmdr. S. L. C.
Sharples, Richard
Wills, Sir Gerald (Bridgwater)


Mills, Stratton
Shaw, M.
Wilson, Geoffrey (Truro)


Montgomery, Fergus
Shepherd, William
Wise, A. R.


More, Jasper (Ludlow)
Simon, Rt. Hon. Sir Jocelyn
Wolrige-Gordon, Patrick


Mott-Radclyffe, Sir Charles
Skeet, T. H. H.
Woodhouse, C. M.


Nabarro, Gerald
Smithers, Peter
Woodnutt, Mark


Neave, Airey
Smyth, Brig. Sir John (Norwood)
Woollam, John


Nicholls, Sir Harmar
Soames, Rt. Hon. Christopher
Worsley, Marcus


Nicholson, Sir Godfrey
Spearman, Sir Alexander



Noble, Michael
Speir, Rupert
TELLERS FOR THE AYES:


Nugent, Sir Richard
Stanley, Hon. Richard
Mr. E. Wakefield and


Oakshott, Sir Hendrie

Colonel J. H. Harrison.




NOES


Abse, Leo
Cullen, Mrs. Alice
Gooch, E. G.


Alnsiey, William
Darling, George
Gordon Walker, Rt. Hon. P. C.


Albu, Austen
Davies,Rt.Hn.Clement (Montgomery)
Gourlay, Harry


Allaun, Frank (Salford, E.)
Davies, G. Elfed (Rhondda, E.)
Greenwood, Anthony


Allen, Scholefield (Crewe)
Davies, Harold (Leek)
Grey, Charles


Awbery, Stan
Davies, Ifor (Gower)
Griffiths, Rt. Hon. James (Llanelly)


Bacon, Miss Alice
Davies, S. O. (Merthyr)
Griffiths, W. (Exchange)


Baird, John
Deer, George
Grimond, J.


Baxter, William (Stirlingshire, W.)
de Freitas, Geoffrey
Gunter, Ray


Bellenger, Rt. Hon. F. J.
Deiargy, Hugh
Hale, Leslie (Oldham, W.)


Bence, Cyril (Dunbartonshire, E.)
Dempsey, James
Hall, Rt. Hon. Glenvil (Colne Valley)


Blackburn, F.
Diamond, John
Hamilton, William (West Fife)


Blyton, William
Dodds, Norman
Hannan, William


Boardman, H.
Donnelly, Desmond
Hart, Mrs. Judith


Bowden, Herbert W. (Leics, S.W.)
Driberg, Tom
Hayman, F. H.


Bowles, Frank
Ede, Rt. Hon. C.
Healey, Denis


Braddock, Mrs. E. M.
Edelman, Maurice
Henderson, Rt. Hn.Arthur (Rwly Regis)


Brockway, A. Fenner
Edwards, Rt. Hon. Ness (Caerphilly)
Herbison, Miss Margaret


Broughton, Dr. A. D. D.
Edwards, Robert (Bilston)
Hewitson, Capt. M.


Brown, Alan (Tottenham)
Edwards, Walter (Stepney)
Hill, J. (Midlothian)


Brown, Rt. Hon. George (Belper)
Evans, Albert
Hilton, A. V.


Brown, Thomas (Ince)
Fernyhough, E.
Holman, Percy


Butler, Mrs. Joyce (Wood Green)
Fitch, Alan
Holt, Arthur


Callaghan, James
Fletcher, Eric
Houghton, Douglas


Chetwynd, George
Foot, Dingle (Ipswich)
Howell, Charles A.


Cliffe, Michael
Foot, Michael (Ebbw Vale)
Hoy, James H.


Corbet, Mrs. Freda
Forman, J. C.
Hughes, Cledwyn (Anglesey)


Craddock, George (Bradford, S.)
Fraser, Thomas (Hamilton)
Hughes, Emrys (S. Ayrshire)


Cronin, John
Gaitskell, Rt. Hon. Hugh
Hughes, Hector (Aberdeen, N.)


Crosland, Anthony
Galpern, Sir Myer
Hynd, H. (Accrington)


Crossman, R. H. S.
George,LadyMeganLloyd (C'rm'rth'n)
Hynd, John (Attercliffe)



Ginsburg, David
Irvine, A. J. (Edge Hill)







Irving, Sydney (Dartford)
Monslow, Walter
Spriggs, Leslie


Janner, Sir Barnett
Moody, A. S.
Steele, Thomas


Jay, Rt. Hon. Douglas
Morris, John
Stewart, Michael (Fulham)


Jeger, George
Mulley, Frederick
Stonehouse, John


Jenkins, Roy (Stechford)
Neal, Harold
Stones, William


Johnson, Carol (Lewisham, S.)
Noel-Baker, Francis (Swindon)
Strauss, Rt. Hn. G. R. (Vauxhall)


Jones, Rt. Hn. A. Creech (Wakelield)
Noel-Baker,Rt.Hn.Philip (Derby,S.)
Stross,Dr.Barnett (Stoke-on-Trent,C.)


Jones, Dan (Burnley)
Oram, A. E.
Swain, Thomas


Jones, Jack (Rotherham)
Oswald, Thomas
Swingler, Stephen


Jones, J. Idwal (Wrexham)
Owen, Will
Sylvester, George


Jones, T. W. (Merioneth)
Padley, W. E.
Symonds, J. B.


Kelley, Richard
Paget, R. T.
Taylor, Bernard (Mansfield)


Kenyon, Clifford
Pannell, Charles (Leeds, W.)
Thomas, George (Cardiff, W.)


Key, Rt. Hon. C. W.
Pargiter, G. A.
Thompson, Dr. Alan (Dunfermline)


King, Dr. Horace
Parker, John (Dagenham)
Thomson, G. M. (Dundee, E.)


Lawson, George
Parkin, B. T. (Paddington, N.)
Thornton, Ernest


Ledger, Ron
Pavitt, Laurence
Thorpe, Jeremy


Lee, Frederick (Newton)
Pearson, Arthur (Pontypridd)
Timmons, John


Lee, Miss Jennie (Cannock)
Peart, Frederick
Tomney, Frank


Lever, Harold (Cheetham)
Pentland, Norman
Ungoed-Thomas, Sir Lynn


Lever, L. M. (Ardwick)
Plummer, Sir Leslie
Wade, Donald


Lewis, Arthur (West Ham, N.)
Prentice, R. E.
Wainwright, Edwin


Lipton, Marcus
Price, J. T. (Westhoughton)
Warbey, William


Logan, David
Probert, Arthur
watkins, Tudor


Loughlin, Charles
Proctor, W. T.
Wells, William (Walsall, N.)


Mahon, Dr. J. Dickson
Pursey, Cmdr. Harry
White, Mrs. Eirene


McCann, John
Rankin, John
Whitlock, William


MacColl, James
Redhead, E. C.
Wigg, George


Mclnnes, James
Reid, William
Wilcock, Group Capt. C. A. B.


McKay, John (Wallsend)
Reynolds, G. W.
Wilkins, W. A.


Mackie, John
Roberts, Albert (Normanton)
Wllley, Frederick


McLeavy, Frank
Roberts, Goronwy (Caernarvon)
Williams, D. J. (Neath)


MacMillan, Malcolm (Western Isles)
Robinson, Kenneth (St. Pancras, N.)
Williams, LI. (Abertillery)


Mallalieu, E. L. (Brigg)
Ross, William
Williams, W. R. (Openshaw)


Mallalieu, J. P. W. (Huddersfield, E.)
Royle, Charles (Salford, West)
Willis, E. G. (Edinburgh, E.)


Manuel, A. C.
Shinwell, Rt. Hon. E.
Wilson, Rt. Hon. Harold (Huyton)


Mapp, Charles
Silverman, Julius (Aston)
Winterbottom, R. E.


Marquand, Rt. Hon. H. A.
Silverman, Sydney (Nelson)
Woodbum, Rt. Hon. A.


Marsh, Richard
Skeffington, Arthur
Woof, Robert


Mason, Roy
Slater, Mrs. Harriet (Stoke, N.)
Yates, Victor (Ladywood)


Mayhew, Christopher
Slater, Joseph (Sedgefield)
Zilliacus, K.


Mellish, R. J.
Small, William



Mendelson, J. J.
Smith, Ellis (Stoke, S.)
TELLERS FOR THE NOES:


Millan, Bruce
Snow, Julian
Mr. G. H. R. Rogers and


Milne, Edward J.
Sorensen, R. W.
Mr. Short.


Mitchison, G. R.
Soskice, Rt. Hon. Sir Frank

Main Question, as amended, put andagreed to.

Resolved,

That this House, noting the improvement in the economic situation of the country since October, 1951, and the present high levels of employment, investment and consumption, and recognising that, in order to meet our commitments at home and abroad, further expansion, particularly in exports, is necessary supports Her Majesty's Government in their determination to strengthen the country's economic and financial position.

Orders of the Day — CONSOLIDATED FUND BILL

Read a Second time and committed to a Committee of the whole House.

Committee Tomorrow.

Orders of the Day — ARMY AND AIR FORCE BILL

Select Committee nominated:—Wing Commander Bullus, Mr. John Eden, Sir Richard Glyn, Mr. Anthony Kershaw, Mr. Christopher Mayhew, Mr. Frederick Mulley, Mr. Paget, Brigadier Sir Otho Prior-Palmer, Mr. James Ramsden, and Mr. Reynolds.

Power to send for persons, papers and records.

Three to be the Quorum.—[Mr. E. Wakefield]

Orders of the Day — ICELANDIC FISHERIES DISPUTE

Motion made, and question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

10.24 p.m.

Mr. Patrick Wall: My object in raising the subject of fishing limits tonight is to put three points to the Government. First, I want them to appreciate that the spring fishing season off Iceland is about to start and, unless agreement is reached very soon, there will inevitably be further incidents. Second, I want the Government to appreciate that in any final agreement reached with the Icelandic Government we must ensure that there is no further extension of limits beyond the 12 miles. Third, I wish to ask what is the Government's view about the setting up of a Western European Fisheries Community.
May I now go into those three points in more detail? The House will recall that at the start of the Law of the Sea Conference in April last year the fishing industry put a voluntary ban on fishing within the 12-mile limit off the Icelandic coast. That voluntary ban is still being implemented. However, March is the start of the spring fishing season, and it is obvious to anyone who knows the fishing ports that the trawler skippers, whatever their orders from the owners, will go inside that limit and that there will be incidents. Naturally, we want to avoid them. A further point is that if agreement is not reached by next month we shall get close to the position of having a de facto agreement on a 12-mile limit, because by then the voluntary ban will have been in existence for a year. If no agreement can be reached by the middle of March, then the trawler skippers will expect naval protection, because they will be lawfully fishing on the high seas within the 12-mile limit. Unless they do carry on fishing there will be the danger of a de facto agreement on the 12-mile limit, as no written agreement has yet been concluded.
The next point that I wish to put to my hon. Friend is the most important of all. I am one of those who believe, after studying what was said at the two Conferences on the Law of the Sea, that a settlement of this problem with Iceland must come by agreeing gradually to implement the 12-mile limit over a period

of years. If we study the Government's views and arguments at the two Law of the Sea Conferences there must inevitably be a final agreement on a phasing out period from 6 to 12 miles. The Fleck Committee, in considering the implications of a 12-mile limit off Iceland, said that this would mean a loss to the distant-water section of the industry of about 20 to 35 per cent. and, to the middlejwater section, a loss of about 50 per cent. of their catch. That would be extremely serious to the whole industry. The subsidies which will soon be available to the distant-water section are no compensation for this serious loss. In some ways they will aggravate the position, as it will mean that the middle-water vessels will be allowed to go to Iceland more than twice a year and, therefore, there will be more vessels, from both the distant and middle-water sections, fishing off Iceland.
The real point of my argument is to remind my hon. Friend that in 1948 the Icelandic Government passed in their Parliament a law concerning the scientific protection of the fishing banks of the coastal shelf. Article I of this law reads:
The Ministry of Fisheries shall specify by regulations the limitations of the protected areas along the coasts of the country, within the boundaries of the coastal shelf, in which all fisheries are to be subject to Icelandic regulations and control.
In other words, according to the law of Iceland, they claim jurisdiction up to the 100-fathom line.
Anyone who has troubled to go through the debates during the two Conferences on the Law of the Sea will have been struck by the point which was always made by the Icelandic representative that fishing limits are of special importance to Iceland because fishing is that country's only industry and that Iceland always asks to be treated as a special case. It may well be that, though they now wish to advance the special case argument to a 12-mile limit, equally it could be advanced at a later date to apply to the 100-fathom line.
This is not a question of conservation. The British industry has always tried to get agreement on conservation. The extension of the limit to 12 miles, and any possible problematic further extension, will merely give the Icelandic Government and industry a private fishing


ground as their own vessels fish within those limits. It is in no way a conservation measure.
Therefore, it is of the utmost importance to the industry that any agreement—and we all want an agreement to be reached—must contain categorical assurances that the Icelandic Government will not in the next two or three years again plead a special case and request a move, or unilaterally make an attempt to move, their limits out to the 100 fathom line. That guarantee must be the basis of any agreement reached. It would be unfair to expect the industry to accept any agreement without having that point fully covered. It is absolutely fundamental, because the industry faces ruin if any further extension beyond 12 miles takes place.
It could well be said that one is asking for the impossible in asking a foreign Government to bind themselves for an indefinite period of time not to extend 'beyond certain limits, that is, beyond 12 miles. I do not believe that argument to be true, because, in my submission, the only real solution to these fishing limits disputes is to set up a Western European Fisheries Community.
That means that all the members of this community, all the Western European nations, would have similar fishing rights, similar landing rights, and similar selling rights. What exactly does that involve? As far as the Western European countries are concerned, Britain is the only large market for their fish, and it would mean, of course, that they would have equal rights with us to land fish and sell fish in this country, but, from our point of view, it would mean that we would have equal rights with Norwegian, Danish, Icelandic vessels to fish within the same limits as they are permitted to fish themselves. I would remind the House that at the moment it is not possible to sell our fish in Iceland or Norway. It is not allowed by law. Indeed, we are not allowed to make investment in Iceland, nor allowed to set up freezing plants or fishmeal plants in Norway. We should, therefore, have the advantage of being able to fish the same seas as the vessels of the other partners in the Western European Fisheries Community

and we should be allowed to land our catches on their shores and they would have similar rights in Britain.
In brief, for I do not want to be very long, as other hon. Gentlemen want to speak in this very short debate, I would suggest that the advantages of a Western European Fisheries Community are three: that it is the only way in which we can really see an end to these fishery disputes; secondly, it will enable us to ensure proper provision for conservation, on the need for which all countries agree, and without which we shall fish out the seas of the world; thirdly, it would serve as a bridge between the Six and the Seven, because all the members of the community, as I see it, would be members already of either the Six or the Seven.
To sum up, we want friendship with Iceland. I am sure I speak for the Members representing the Humber ports when I say that we value our traditional friendship with Iceland, that we admire the Icelanders' independence, and like them, and that we want to go on being friendly with them. We are prepared to concede quite a lot, as I have indicated, to keep that traditional friendship, but we are not prepared to see the end of our industry, and any extension beyond the limit of 12 miles would mean the end of the British fishing industry. I would urge my hon. Friend to continue pressing for an agreement, and would emphasise that in that agreement there must be a categorical undertaking by the Icelandic Government not to plead a special case at a later date and further to extend the agreed limits.
Finally, I would ask my hon. Friend to express his view on the suggestion of a Western European Fisheries Community, about which, I have great hopes, and I believe that a similar view will be shared by hon. Members on both sides of the House.

10.34 p.m.

Mr. Stan Awbery: It was in September, 1958, that this trouble with the Icelandic Government started. I raised the matter in the House by means of Questions on several occasions. I am not very much concerned whether the limit will be 3, 6 or 12 miles, but I am concerned with the conditions of the men who are employed in the industry.
More than thirty attempts have been made by the Icelandic people to board our trawlers, but on only two occasions have they succeeded, because of the presence of our protection vessels. On several occasions guns have been fired and the lives of our men are put in jeopardy each time they go into the area. I am very much concerned about the risk that these men are taking.
My accusation against the Government tonight is that they have failed to come to an agreement in three years. They stated in March, 1959, that they were anxious to come to an agreement with the Icelandic Government. The negotiations were urgent and they were prepared to meet and to discuss the problem, but nothing has been done since.

Mr. Wall: Does not the hon. Member agree that it takes two to make an agreement?

Mr. Awbery: The hon. Member may have that view.
At the end of March, 1959, because of the trouble, our trawlers in the area were divided into three packs and we had a protection vessel to protect each pack. That meant that the Government were responsible financially for keeping three or four protection vessels in the area, because the Government have failed to come to an agreement concerning the distance.
At the last meeting but one of the Conference on the Law of the Sea, a resolution for the 12-mile limit was put forward. Thirty-nine nations voted in favour of 12 miles, 38 voted against and 8 nations were neutral. Because there was not a substantial majority, the 12-mile limit could not be put into effect. Are we to go on indefinitely like this, putting our fishermen in a difficult position in the North Sea? Are not the risks taken by our fishermen great enough without taking risks of that character also?
What is the alternative to agreement? Will the Government ask for arbitration and agree to abide by the decision of the arbitrator, or are we to allow these men to go on their daily avocations taking these risks? We in this House are not near the danger. We are many miles away from it. If we were in the danger zone, there is no doubt that we would tackle the problem much faster than we are doing.
Up to the present, we have maintained the 3-mile limit. We have maintained that limit, not by agreement, but because of the force that we have at our disposal. If we did not have the force at our disposal, we could not maintain the 3-mile limit as we have done. We apparently intend to stick to this.
I ask the Government to give serious consideration to the problem and, if necessary, to make a compromise. The Panama Government have established a 12-mile limit, even outside the Canal zone. I know that complaint has been made. America states that she does not recognise the 12-mile limit of Panama. Nevertheless, the Panama Government have established it. Norway will be negotiating shortly with Denmark and Sweden to discuss this problem. Norway will extend her lmit to 6 miles on 1st April this year and will continue to extend it to 12 miles on 1st September. The Anglo-Danish agreement specifies 6 miles. All these agreements have been made.
Why cannot our Government come to an agreement with the Icelandic Government for a limit of 3 or 6 miles? Many nations are adapting themselves to the circumstances of the day and they are limiting their fishing areas. The Government should make another determined and sincere attempt to meet the Icelandic people and try to come to an agreement with them.

10.40 p.m.

The Joint Under-Secretary of State for Foreign Affairs (Mr. J. B. Godber): I am glad that my hon. Friend the Member for Haltemprice (Mr. Wall) has had the opportunity of raising this important matter tonight. I listened with interest to all that he said, and with some concern, I must frankly say, to the remarks of the hon. Member for Bristol, Central (Mr. Awbery), to whose speech I will come in a moment.
I should like to assure my hon. Friend at once of the Government's very real concern about the difficulties facing our distant-water fishermen and the fishing industry as a whole in this very unfortunate dispute with Iceland. We are—and I want to place this on record—very grateful for the patience and restraint which the industry has shown. It has shown this patience and restraint over a long period, as the hon. Member for Bristol, Central reminded us. but


particularly in recent months. Its attitude has done everything possible to try to create the right atmosphere for our discussions with the Icelandic Government on this matter.
My hon. Friend is of oourse aware, as I am sure the House is also, of the problems which confronted us after the breakdown of the second United Nations Conference on the Law of the Sea last April. I will not go into them now. I would only say that we are continuing our efforts to achieve as large a measure as possible of international agreement on the breadth of fishery limits.
It is in our view essential that this matter should remain subject to the rule of international law, and until a new rule of law is established Her Majesty's Government cannot recognise unilateral extensions of limits as valid in international law. We have, however, since the Geneva Conference been prepared to take account of the United States-Canadian proposal whioh failed, and failed only by one vote, in adjusting our fishery relations with countries which claim or intend to claim unilaterally extended fishery jurisdiction. This, of course, we have already done in the case of Norway, and I am glad to say that we have succeeded there in securing an agreement which, we are satisfied, represents in the circumstances a reasonable compromise.
If we were to take the line which the hon. Member for Bristol, Central seemed to advocate—he was suggesting that because the Icelanders were taking up a certain position we must concede to them—that would be wholly wrong. We have responsibilities to our own fishermen, the very men for whom he claims to be speaking, and I do not believe that it would be to their benefit were we to give way.
With Iceland we have had long and difficult discussions. We have been aware all along that the negotiations would require considerable patience because of the political difficulties of the Icelandic Government and of the importance of fishing to their economy. We have always recognised that. But I must say quite frankly that our difficulties in these talks have been of the highest order. We could not get agreement even to the holding of talks until last August, and

the talks themselves did not get started until October. Valuable time was therefore lost. The British fishing industry, however, adhered during this time to its decision to stay outside 12 miles while hope of useful discussions seemed likely.
Since the exchanges began last October these have involved numerous meetings of officials, and in December my noble Friend had a number of discussions with the Icelandic Foreign Minister in Paris and London. These discussions had narrowed the differences between the two sides, and we had reason to hope that agreement was in sight. But since Christmas I have to state that there has been little progress, despite considerable efforts on our part. We are pressing for a positive reply from the Icelandic Government within the next few days.
I fully understand, and indeed I share, the concern expressed by my hon. Friend the Member for Haltemprice over the delay in reaching a settlement, particularly in view of the imminence of the spring fishing to which he so rightly called attention. I realise how important this season is to our fishermen and the dangers that are likely to arise. I assure him that the Government for their part realise that it is imperative to get a settlement before the spring season starts, and we have left the Icelandic Government in no doubt of the serious situation which will arise if no settlement is reached by then.
But, as these discussions are still in progress, I am sure that the House will realise that I cannot very well comment on them in detail. I have, however, noted what my hon. Friend said about the importance which the industry attaches to really firm and binding assurances for the future in any agreement that is arrived at. I can assure the House that we recognise the particular importance of this matter to the industry and that we have had it in the forefront of our minds throughout the course of these discussions.
The gist of the problem which, with respect, I do not think the hon. Member for Bristol, Central fully faces, is the fact that we have to try to secure the future of our industry and we have to get a fair arrangement with the Icelanders if those men for Whom the hon. Member claims to be speaking are to be secure in their employment and to


have satisfactorily remunerative jobs in their fishing and if we are to secure that our fishing industry as a whole gets a fair deal.
It is this anxiety to secure a truly long-term decision which is at the back of all our thoughts in these negotiations. The hon. Member for Bristol, Central sought to give certain figures of the voting at the United Nations Conference in Geneva. I remind him again that the really important vote was the one taken at the last Conference on the Canadian—American resolution and which failed, as I said earlier, by one vote to get a two-third majority.

Mr. Awbery: For what?

Mr. Godber: For 6 miles initially, phasing out to 12 miles later.
It is on that basis that we have concluded an agreement with the Norwegians and we are willing to conclude an agreement with the Icelanders too. If they are as forthcoming and reasonable on that basis we are willing to arrive at an agreement straight away. It is in the interest of those whom the hon. Member for Bristol, Central represents, just as much as that of the trawler owners or anyone else, that we should get an agreement as nearly on that basis as possible.
I was interested in what my hon. Friend the Member for Haltemprice said about the concept of a Western European Fisheries Community. This matter was referred to a great deal in debate last week and I can only repeat what my right hon. Friend then said, namely that the ideas are extremely interesting and no doubt will be studied by all concerned. But in my view they do not offer any solution to our immediate problem with Iceland and it would be quite wrong to think that they did. I am sure that my hon. Friend was not suggesting that they did.
I hope that the House will be satisfied with my assurance that we are doing all we can to resolve this most difficult problem, and we have left the Icelanders in no doubt about the concern that we feel, and the fishing industry also feels, about getting a speedy solution. We believe that if we can get a reasonable arrangement now which will stand the test of time—and that is the importance of it to the industry—and which will

be something the industry can really count on, we can achieve, with a certain amount of goodwill on both sides, something which will get rid of this unhappy dispute and which I believe will give us an opportunity of opening a new chapter in our relations with Iceland with which we have close ties of friendship.
I think that is what we have to seek to work for. I assure the House that my noble Friend is personally taking a close part in the discussions which I hope, and I am sure the House hopes, we shall be able to bring to a successful conclusion.

Mr. Awbery: If there is no agreement between the parties, is there any means of referring this to arbitration?

Mr. Godber: On various occasions We have offered to refer to arbitration; but, again, it takes two sides to agree to refer to arbitration.

10.50 p.m.

Mr. James Hoy: We on this side of the House hope that these negotiations will be successful. I would remind the House that the proposals put forward for a 6-mile limit, with a further extension of 6 miles over a phased period—remembering the rights of old countries like ours which have fished within 6 miles for many years—had the support not only of the Trawler Federation, but of the fishermen themselves.
The trawlermen, and indeed the officers and mates, thought that perhaps we had gone a little too far in making concessions, but they were prepared to go that distance, and that was the distance to which we went at the Law of the Sea Conference. That concession was made by the men engaged in the industry as well as by the British trawler owners.
It is true that, if we are to have agreement, we require agreement from Iceland as well as from this country. We have gone a considerable way towards making an agreement possible, as we did in the case of Norway with whom we have reached a satisfactory settlement. It has been open to the Icelandic Government to accept the position, but so far they have rejected it. One can only hope that they will see reason and that eventually we will get


a long-term agreement on the plan that I had the privilege to outline on behalf of my hon. Friends last week during the debate on the Fleck Committee's Report.
I think that we must get a fairly wide settlement covering all the Western European nations. Perhaps we might enlist the support of America and Canada to try to find a real solution to this problem.
We appreciate only too well that this is something which affects Iceland's economy, but we must also realise that there are a considerable number of our

people who earn a livelihood in the fishing industry, and they are as entitled as other people to have their interests safeguarded.
I hope that an amicable agreement will be reached. I hope that Iceland, with whom we have always been friendly and with whom we wish to remain friendly, will see our point of view. If, out of our friendship, we can make a lasting settlement, it will be of benefit to both countries.

Question put and agreed to.

Adjourned accordingly at seven minutes to Eleven o'clock.